A Fall in the Price of Widgets Leads Consumers to Buy

question 18

Multiple Choice

A fall in the price of widgets leads consumers to buy more widgets.What can we conclude from this information

• A)Substitution effect is positive.
• B)Income effect is negative.
• C)Demand is upward sloped.
• D)Demand is downward sloped.

---

Definitions:

Common Shareholders

Individuals or entities that hold common stock in a corporation, entitling them to dividends and voting rights, but placing them last in priority for company assets in case of liquidation.

Dissolve

To formally end or terminate an entity, such as a corporation, partnership, or marriage, through legal means.

Outstanding Common Shares

The total number of common shares of a corporation that are issued and currently held by shareholders.

Total Equity

The total net value of a company, calculated as the difference between its total assets and total liabilities.