What Do the Income Effect, the Substitution Effect, and Diminishing

question 108

Multiple Choice

What do the income effect, the substitution effect, and diminishing marginal utility have in common?

• A)All are required to explain the utility-maximizing position of a consumer.
• B)They are all empirically measurable.
• C)They all help explain the upsloping supply curve.
• D)They all help explain the downsloping demand curve.

---

Definitions:

Nominal Variables

Variables that represent categories with no intrinsic ranking or order, such as gender, nationality, or brand names.

Degrees of Freedom

The number of values in a calculation that are free to vary without violating any constraints.

Contingency Table

A tabular method to display the frequency distribution of variables along with their joint distribution.

Contingency Table

A type of table used in statistics to summarize the relationship between two categorical variables, showing the frequency of various combinations of outcomes.