When a Consumer Experiences a Price Decrease for an Inferior

question 532

Multiple Choice

When a consumer experiences a price decrease for an inferior good, if the income effect is

• A)less than the substitution effect, the demand curve will be downward sloping.
• B)greater than the substitution effect, the demand curve will be upward sloping.
• C)less than the substitution effect, the demand curve will be upward sloping.
• D)both a) and b) are correct.

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Definitions:

Perceptual Strategies

Approaches and methods used by the brain to interpret and understand sensory information.

Frequencies

In psychology, often refers to the rate at which a behavior occurs or the rate of occurrence of a particular mental process.

Harmony

The combination of simultaneously sounded musical notes to produce chords and chord progressions having a pleasing effect.

Stimulus

Any event or situation that evokes a response from an organism.