Examlex
Which statement below would accurately describe step 1?
Substitution Effect
The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another more or less expensive one.
Income Effect
Income effect describes the change in an individual's or economy's consumption patterns due to a change in real income.
Opportunity Cost
The cost of foregone alternatives, the value of the best alternative given up when a decision is made.
Wage Increases
Adjustments made to the salary of employees, typically to account for inflation, performance, or changes in the cost of living.
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