The Change in Consumption That Results When a Price Change

question 183

Multiple Choice

The change in consumption that results when a price change moves the consumer along a given indifference curve to a point illustrating the new marginal rate of substitution is called the

• A)income effect.
• B)substitution effect.
• C)Giffen good effect.
• D)inferior good effect.

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Definitions:

Determinism

The philosophical doctrine that all events, including moral choices, are ultimately determined by causes external to the will.

Associationism

A theory in psychology that states mental processes operate by the association of one mental state with its successors.

Free Will

denotes the philosophical and psychological concept of individuals' capacity to choose or make decisions independently, free from external constraints or predetermined destinies.

Self-Actualization

The fruition or fulfillment of a person's gifts and capabilities, recognized as an inherent impulse or demand in each individual.