The Substitution Effect Graphically Is Always Denoted

question 80

Multiple Choice

The substitution effect graphically is always denoted:

• A)by movement along the original indifference curve, whereas the income effect is represented by a rotation of the budget line.
• B)by moving in the direction of the item that is becoming relatively more expensive.
• C)by moving in the direction of the item that is becoming relatively cheaper and the income effect is always denoted by a rotating budget line.
• D)by movement along the original indifference curve, whereas the income effect is represented by a parallel shift of the budget line.

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Definitions:

External Interrelationships

Connections between an entity and external factors or other entities that influence or are influenced by it.

Kingsley Davis

An American sociologist and demographer known for his work on human society, population growth and decline, and the concept of the demographic transition.

Wilbert Moore

A sociologist known for his work on the functionalist theory of social stratification and the social aspects of economic development.

Society

A body of individuals participating in ongoing social relationships, or a substantial social entity occupying the same spatial or societal area, usually under the control of identical political leadership and common cultural standards.