6A-5 Income and Substitution Effects FIGURE 6-11

question 53

Multiple Choice

6A-5 Income and Substitution Effects FIGURE 6-11
-Refer to Figure 6-11.Suppose the consumer begins at E₁.The income and substitution effects of the reduction in the price of X are represented as follows:

• A)the distance Q₁d shows the substitution effect and the distance Q₂e shows the income effect.
• B)the distance de shows the income effect and the distance cd shows the substitution effect.
• C)the distance Q₁Q₂ shows the income effect and the distance Q₂Q₃ shows the substitution effect.
• D)the distance Q₁Q₂ shows the substitution effect and the distance Q₂Q₃ shows the income effect.
• E)the distance Q₁Q₃ shows the substitution effect and the distance Q₂Q₃ shows the income effect.

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Definitions:

Participant Observation

A qualitative research method where the researcher immerses themselves in a group or community to observe behaviors and interactions from within.

Covert Observation

Observational research in which the subject(s) are unaware that they are being observed, often used to gather more natural behavior data.

Environment

The surrounding physical, biological, and socioeconomic conditions and factors that influence the growth, development, and survival of organisms and human communities.

Personality

A set of emotional, attitudinal, and behavioral response patterns of an individual, distinguishing one person from another.