The Substitution Effect

question 62

Multiple Choice

The substitution effect

• A)always dominates the income effect.
• B)is always dominated by the income effect.
• C)results in an increase in the quantity of the good consumed when the price rises.
• D)results in a decrease in the quantity of the good consumed when the price falls.
• E)is greater than the price effect.

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Definitions:

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A cognitive distortion where a person makes broad interpretations from a single or a few events.

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A mental health disorder characterized by persistent feelings of sadness, lack of interest in activities, and various emotional and physical problems.

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An individual’s overall subjective evaluation of their own worth or value.