The Income Effect Means That When the Price of a Good

question 14

Multiple Choice

The income effect means that when the price of a good rises:

• A) the buying power of your income has been reduced
• B) consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price
• C) your preferences also change
• D) you buy more normal goods and fewer inferior goods

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Definitions:

Motion Parallax

A depth cue that involves images of objects at different distances moving across the retina at different rates.

Apparent Movement

The perception of movement in a stationary object due to rapid sequential presentation of images or due to the context in which the object is viewed.

Visual Field

The total area in which objects can be seen in the peripheral vision while the eye focuses on a central point.

Sequential Intervals

Time periods or sequences that follow one another in a specific, ordered manner.