When the Price of a Product Rises, Consumers with a Given

question 78

Multiple Choice

When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes

• A) an inferior good.
• B) the rationing function of prices.
• C) the substitution effect.
• D) the income effect.

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Definitions:

Hopes and Fears

Emotional responses to potential future events, with hopes being positive anticipations and fears being negative anticipations.

Reflexive Modernity

A new period of modernity in which the traditional stability-maintaining structures of class, family, and industrial forms of production have waned, placing greater pressure on people to create their own sense of stability and identity.

Ontological Security

A stable mental state derived from a sense of continuity in one's social and material identities, providing a sense of order in one's life.