Simplify

question 52

Multiple Choice

Simplify:

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute more expensive items with cheaper alternatives.

Income Effect

The link between alterations in income for a person or the economy and the subsequent shift in demanded quantity of a product or service.

Indifference Curves

A graphical representation of different combinations of two goods or services that give a consumer equal satisfaction and utility.

Downsloping

Describing a curve or trend that decreases in value as it moves rightward on a graph, typically referring to demand curves where price and quantity demanded are inversely related.