In General,the Spread for Retail Transactions Is

question 4

Multiple Choice

In general,the spread for retail transactions is:

• A) quite narrow, about 10 points.
• B) in the range of 20 to 30 points.
• C) in the range of 10 to 20 points.
• D) in excess of 50 points.

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Definitions:

Income Effect

The change in an individual's consumption choices resulting from a change in their real income.

Substitution Effect

The economic understanding that as prices rise (or incomes decrease), consumers will replace more expensive items with less costly alternatives.

Inferior Good

A type of good for which demand decreases when the income of the consumer increases, inversely related to normal goods.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.