Which of the Following May Function as an Motivating Operation

question 9

Multiple Choice

Which of the following may function as an motivating operation?

• A) deprivation
• B) satiation
• C) instructions
• D) all of these

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Definitions:

Substitution Effect

The economic principle that as the price of a good increases, consumers will replace it with cheaper alternatives.

Income Effect

The variation in income for a person or an economy and its impact on the demand for a specific good or service.

Perfect Substitutes

Goods that can serve the same purpose perfectly, where consumers are indifferent between them and will select based on price.

Giffen Good

A product that paradoxically sees an increase in demand as its price increases, violating the basic law of demand due to the income effect overshadowing the substitution effect.