Examlex
Which of the following processes causes salty potato chips left outside in an uncovered bowl to turn soggy on a humid day?
Substitution Effect
The change in consumption patterns due to a change in the relative price of goods, leading consumers to substitute away from higher-priced goods toward lower-priced ones.
Income Effect
How an adjustment in income levels for individuals or the economy affects the demand for goods or services.
Engel Curve
A graphic representation showing how a consumer's demand for a good varies with income, keeping other factors constant.
Strictly Convex Preferences
Preferences where consumers always prefer mixtures of goods to extremes, demonstrating a consistent desire for variety.
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