When the Price of a Good Changes, the Amount of That

question 5

Multiple Choice

When the price of a good changes, the amount of that good that buyers wish to buy changes:

• A)solely because of the substitution effect.
• B)solely because of the income effect.
• C)because of both the substitution and the income effects.
• D)only if the substitution effect and the income effect do not cancel out each other.