The Difference Between a Price Increase and a Decrease in Income

question 44

Multiple Choice

The difference between a price increase and a decrease in income is that

• A)A decrease in income does not affect the slope of the budget line while an increase in price does change the slope.
• B)A price increase does not affect the consumption of other goods while a decrease in income does.
• C)A price increase will increase real income while a decrease in income will increase real income.
• D)None of the statements associated with this question are correct.

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Definitions:

Life Estate

A property interest that lasts for the life of the holder, after which the property reverts to the grantor or a specified remainderman.

Legal Recourse

Legal recourse refers to the right of an individual or entity to seek legal remedy or compensation through the judicial system in response to a wrongdoing or dispute.

Future Owner

An individual or entity that is designated or expected to become the owner of an asset or property at a future date.

Repairs

The process of fixing or restoring something that is broken, damaged, or malfunctioning to a good condition.