Which Effect of a Price Change Moves the Consumer Along

question 34

Multiple Choice

Which effect of a price change moves the consumer along the same indifference curve to a point with a new marginal rate of substitution?

• A)the budget effect
• B)the preference effect
• C)the substitution effect
• D)the income effect

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Definitions:

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives to achieve a desired outcome.

Incentive Compensation

A form of payment designed to motivate employees by linking a portion of their earnings to performance criteria.

Organization

A systematic arrangement of people and resources managed to accomplish a collective goal or set of goals.

Vice President

A senior-level executive in an organization, typically responsible for overseeing specific departments or operations.