The Price of a Large Pepperoni Pizza Used to Be

question 100

Multiple Choice

The price of a large pepperoni pizza used to be $14, but this week the price rose to $18. With a budget of just $30, you can't afford as many pizzas at the higher price. This change in consumer behavior reflects the

• A) real income effect.
• B) substitution effect.
• C) nominal income effect.
• D) concept of diminishing marginal utility.

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Definitions:

Random Variable X

A variable whose possible values are numerical outcomes of a random phenomenon, with each outcome having an associated probability.

Probability Model

A mathematical representation of a random phenomenon, defined by a sample space, events within the sample space, and probabilities associated with each event.

Fair Dice

A perfectly balanced dice where each outcome has an equal chance of occurring, ensuring unbiased results in games of chance.

Sum Greater

A condition or outcome where the total quantity or amount exceeds a specified reference point or comparison amount.