Examlex
One of the major differences between the first and second line of defense is that ______.
Substitution Effect
The economic understanding that as prices rise (or incomes decrease), consumers will replace more expensive items with less costly alternatives.
Inferior Good
A type of good for which demand decreases when the income of the consumer increases, inversely related to normal goods.
Income Effect
The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.
Substitution Effect
Refers to the change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility constant.
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