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

question 41

Multiple Choice

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

• 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 \(x\) .

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Definitions:

Widgets

A generic term commonly used to refer to an unspecified, fictional product used in examples and economic theory.

Price Floor

A minimum price set by the government for certain goods and services that cannot legally be lowered, often above the equilibrium price.

Market Supply

Market supply represents the total quantity of a particular good or service that all producers are willing and able to sell at different price levels in a given period.

Producer Surplus

The difference between the amount that a producer is paid for a good or service and the lowest amount they are willing to accept for that good or service.