The Substitution Effect Shows That

question 50

Multiple Choice

The substitution effect shows that

• A) if the price of a good increases, consumers buy more of that good and less of all others.
• B) if the price of a good falls relative to all other goods, consumers buy less of that good and more of all others.
• C) if the price of a good falls, consumers buy less of all goods.
• D) if the price of a good rises, consumers buy less of that good and more of others.