If the Price of a Good Increases, the Substitution Effect

question 125

Multiple Choice

If the price of a good increases, the substitution effect will

• A) always tend to make the quantity decrease, while the income effect could go either way.
• B) always tend to make the quantity increase, while the income effect could go either way.
• C) go either way, but the income effect will always make the quantity increase.
• D) go either way, but the income effect will always make the quantity decrease.

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Definitions:

Sodium-Potassium Pump

A vital cell membrane protein that pumps sodium ions out of and potassium ions into cells, essential for maintaining cellular electrochemical gradients.

ATP

Adenosine triphosphate, a molecule that carries energy within cells, serving as a primary energy currency for cellular processes.

Exocytosis

A process by which a cell transports secretory products through the cytoplasm to the plasma membrane and then into the extracellular space.

Endocytosis

The active transport of substances into the cell by the formation of invaginated regions of the plasma membrane that pinch off and become cytoplasmic vesicles.