Figure 21-21 -Refer to Figure 21-21. Suppose That a Consumer Is Originally

question 255

Multiple Choice

Figure 21-21
-Refer to Figure 21-21. Suppose that a consumer is originally at point R. Then the price of good X decreases. Which of the following represents the substitution effect of the price decrease?

• A)the movement from point R to point S
• B)the movement from point R to point T
• C)the movement from point T to point S
• D)None of the above is correct.

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Definitions:

Single Tax

A tax system with only one type of tax, often proposed to simplify the tax structure and eliminate inefficiencies.

Henry George

A 19th-century economist known for his advocacy for a single tax on land value to improve social and economic inequalities.

Land

In economics, land comprises all naturally occurring resources whose supply is inherently fixed.

Marginal Revenue Product (MRP)

The additional revenue generated from using one more unit of a factor of production, holding all other factors constant.