In the Market for Magazines, the "Income Effect" Means That

question 131

Multiple Choice

In the market for magazines, the "income effect" means that

• A) magazines are usually purchased by people with higher than average incomes.
• B) a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before.
• C) an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines.
• D) an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.

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Definitions:

Heteronomous Morality

The stage in child development where moral thinking is tied to obedience and punishment, typically regulated by external authority.

Conventional Moral Reasoning

A stage in moral development where individuals make judgments based on societal rules and laws.

Transgression

is an act that goes against a law, rule, or code of conduct; an offense.

Lying

The act of intentionally making a false statement with the purpose of deceiving others.