Assume That the Price of Gasoline Falls

question 80

Multiple Choice

Assume that the price of gasoline falls.Conceptually,if we wish to isolate the substitution effect of the price change we must:

• A)place the consumer at a new indifference curve with new relative prices.
• B)place the consumer on the original indifference curve with the original relative prices.
• C)place the consumer on the original indifference curve with the new relative prices.
• D)place the consumer at a new indifference curve with the original relative prices.

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