What Is the Substitution Effect of an Increase in the Price

question 194

Multiple Choice

What is the substitution effect of an increase in the price of peaches?

• A)The change in the quantity demanded that results from a change in the price of peaches making peaches more expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.
• B)The change in the demand for nectarines (a substitute good)that results when peaches become more expensive relative to nectarines, holding constant the effect of the price change on consumer purchasing power.
• C)The change in the quantity demanded of peaches that results from the effect of the change in the price of peaches on the consumer's purchasing power.
• D)The change in the demand for peaches that results when the price of peaches increases.

---

Definitions:

Meat Powder

A product derived from dehydrated and pulverized meat, used in various culinary or laboratory experiments.

Bell

A device that produces sound through the vibration of a metal component, often used for signaling or alert purposes.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually triggers a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any prior learning.