Suppose a Consumer Can Purchase Only Two Goods, Soap and Apples

question 8

Multiple Choice

Suppose a consumer can purchase only two goods, soap and apples. If the price of soap falls and the consumption of apples increases, we can conclude that the increased consumption of apples is due to

• A) the income effect only.
• B) both the income effect and the substitution effect.
• C) the deflation effect.
• D) neither the income effect nor the substitution effect.
• E) the substitution effect only.

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Definitions:

Feature Detectors

Neurons in the brain that respond to specific features of a stimulus, such as lines, edges, or movement, playing a crucial role in the process of perception.

Narrow Black-And-White Lines

A visual pattern typically consisting of slim, alternating black and white stripes.

Gestalt Psychology

A school of thought in psychology that emphasizes viewing the mind and behavior as organized wholes.

Slogan

A short and striking or memorable phrase used in advertising.