Instructions: Identify the Following Terms

question 13

Short Answer

Instructions: Identify the following terms:
Proclamation Line of 1763

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Definitions:

Substitution Effects

The substitution effect occurs when consumers replace more expensive items with less costly alternatives as prices rise.

Income Effect

The change in an individual's consumption resulting from a change in their income.

Normal Good

A good for which demand increases as the income of the consumer increases, showing a positive relationship between income and demand.

Income Effect

The impact of income fluctuations on an individual or an economy on the quantity of goods or services that is demanded.