The Substitution Effect

question 17

Multiple Choice

The substitution effect

• A) is always larger than the price effect.
• B) is always smaller than the income effect.
• C) always decreases purchases of a good as the price of a good rises.
• D) increases purchases of the good as the price rises if the good is a normal good.

---

Definitions:

Middle Childhood

A developmental stage that typically covers the period from around 6 to 12 years of age, characterized by significant growth in cognitive, emotional, and social domains.

Industry Versus Inferiority

Erikson’s fourth stage of psychosocial development, in which children must learn the productive skills their culture requires or else face feelings of inferiority.

Global Self-Worth

Refers to a person's overall evaluation or appraisal of their own value or worth as an individual.

Competent

Having the necessary ability, knowledge, or skill to do something successfully.