When Does an Increase in Price Produce a Substitution Effect

question 26

Multiple Choice

When does an increase in price produce a substitution effect?

• A) only if purchasing power is impacted significantly
• B) only if there is a real-income effect
• C) only if marginal utility per dollar decreases relative to another good
• D) only if marginal utility per dollar increases relative to another good
• E) always

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Definitions:

Consistency

the quality of always acting or behaving in the same way, showing reliability and uniformity in one's actions.

Distinctiveness

The quality of being clearly different or unique in comparison to others.

Collective Unconscious

A concept in analytical psychology proposing that societies share a set of inherited mental structures, which are not acquired by personal experience but are innate.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, emphasizing the importance of the individual psyche and the personal quest for wholeness.