The Substitution Effect from a Rise in the Price of Pizza

question 394

Multiple Choice

The substitution effect from a rise in the price of pizza

• A) leads to a movement along the fixed budget line, due to a change in relative prices.
• B) increases the quantity demanded of pizza.
• C) decreases the quantity demanded of pizza.
• D) Both answers A and B are correct.

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Definitions:

Poor

Individuals or groups lacking financial resources and essential goods for a standard living.

Child Poverty Rate

The percentage of children living in households with incomes below a certain threshold, which is often considered insufficient for meeting basic needs.

Industrial World

Regions or countries characterized by advanced technological infrastructure and a high level of industrialization.

Upper Two Quintiles

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