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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