What Are the Two Effects of a Change in a Price

question 218

Multiple Choice

What are the two effects of a change in a price that a consumer experiences?

• A)the income effect and the budget effect
• B)the complement effect and the substitute effect
• C)the price effect and the preference effect
• D)the income effect and the substitution effect

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Units per Year

A measure of production output or activity volume, indicating the number of units produced or sold within a year.

ROI Computation

The calculation of Return on Investment, which measures the gain or loss generated on an investment relative to the amount of money invested.

Net Book Value

The value of an asset after accounting for depreciation or amortization found on a company's balance sheet.