When the Price of a Product Falls, the Purchasing Power

question 250

Multiple Choice

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

• A) an inferior good.
• B) the rationing function of prices.
• C) the substitution effect.
• D) the income effect.

---

Definitions:

Expression

A combination of variables, numbers, and operations without an equal sign.

A

Often used to denote a variable in equations or to represent a constant value in various mathematical contexts.

Positive Exponents

Refers to exponents that are greater than zero, indicating the number of times a base is multiplied by itself.

Rules Of Exponents

Guidelines that describe how to handle powers when multiplying, dividing, or raising them to other powers.