The Difference Between a Price Decrease and an Increase in Income

question 57

Multiple Choice

The difference between a price decrease and an increase in income is that

• A) A price decrease does not affect the consumption of other goods, while an increase in income does.
• B) An increase in income does not affect the slope of the budget line, while a decrease in price does change the slope.
• C) A price decrease decreases real income, while an increase in income increases real income.
• D) A price decrease leaves real income unchanged, while an increase in income increases real income.

---

Definitions:

Face Validity

The extent to which a test appears to measure what it is supposed to measure at face value.

Naturalist Intelligence

A type of intelligence described by Howard Gardner, involving sensitivity to and understanding of the natural world and living things.

Intrapersonal Intelligence

A type of intelligence that involves the capacity to understand oneself, including one's emotions, motivations, and thoughts.

Bodily-Kinesthetic Intelligence

A type of intelligence characterized by the ability to control bodily motions and handle objects skillfully.