An Excise Subsidy Given on Clothing Will Encourage Consumers to Purchase

question 38

Multiple Choice

An excise subsidy given on clothing will encourage consumers to purchase:

• A)more clothing due to the substitution effect.
• B)less clothing due to the income effect.
• C)more clothing and less of other goods.
• D)less clothing since clothing is an inferior good.

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Definitions:

Induced Hypocrisy

A psychological state or condition whereby individuals are made to recognize the contradiction between their attitudes and behavior, often to prompt a change.

Paradigm

A typical example or pattern of something; a model that is especially prevalent in scientific theories or how particular sets of rules define a scientific discipline.

Counterattitudinal Behavior

Actions that are contrary to one's personal beliefs, attitudes, or values, which can sometimes lead to a change in those attitudes due to cognitive dissonance.

Spreading Alternatives

The act of diversifying choices or options in decision-making or behavior.