Which of the Following Statements About the Substitution Effect of a Price

question 229

Multiple Choice

Which of the following statements about the substitution effect of a price change is true?

• A)It is caused by a change in relative prices.
• B)It affects the consumer's ability, rather than willingness, to purchase a good.
• C)It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
• D)It is usually equal to the income effect.
• E)It may cause the consumer to buy less of the good when its price falls.

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Definitions:

Protostomes

A clade of animals characterized by embryonic development in which the mouth forms before the anus during early embryogenesis.

Cladogram

A diagram used in cladistics which shows relations among organisms based on the presence of shared characteristics not found in their ancestors.

Bilateral Symmetry

A type of body symmetry where the body can be divided into identical left and right halves along a single plane.

Protostome Development

A mode of animal development in which the mouth forms before the anus during embryogenesis, characteristic of mollusks, annelids, and arthropods.