If Consumers Purchase More of a Good Because Its Relative

question 143

Multiple Choice

If consumers purchase more of a good because its relative price has gone down, then it would be described as

• A) the substitution effect.
• B) the income effect.
• C) a rightward shift of the budget line.
• D) a rightward shift of the indifference curve.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Debit Column

A column in accounting ledgers and financial statements used to record increases in asset or expense accounts, and decreases in liability, equity, or revenue accounts.

Credit Column

A column in accounting records or financial statements used to record amounts that reduce balances in asset or expense accounts, or increase balances in liability, equity, or revenue accounts.

Financial Statement

A written record that conveys the financial activities and conditions of a business or individual.