If $x$ Is an Inferior Good and the Price Of $x$ Falls
A) the Substitution Effect Will Induce the Consumer to x

question 2

Multiple Choice

If $x$ is an inferior good and the price of $x$ falls

• A) the substitution effect will induce the consumer to purchase more \(x\) and the income effect will induce the consumer to purchase more \(x\) .
• B) the substitution effect will induce the consumer to purchase more \(x\) and the income effect will induce the consumer to purchase less \(x\) .
• C) the substitution effect will induce the consumer to purchase less \(x\) and the income effect will induce the consumer to purchase more \(x\).
• D) the substitution effect will induce the consumer to purchase less \(x\) and the income effect will induce the consumer to purchase less \(x\) .

---

Definitions:

Indifference Curves

Graphical representations used in economics to show different combinations of two goods that give an individual equal satisfaction and utility.

Budget Constraints

The limits imposed on household choices by income, wealth, and product prices, determining the combination of goods and services they can afford.

Interest Rate

The percentage of a sum of money charged for its use, determining how much borrowers pay to lenders for loans or how much they earn on deposits.

Retirement

The act of leaving one's job or career and ceasing to work, typically due to age or health reasons, often accompanied by receipt of a pension or retirement savings.