When the Price of a Normal Good Decreases, People Increase

question 373

Multiple Choice

When the price of a normal good decreases, people increase their consumption of the good. The reason is

• A) the law of diminishing marginal utility.
• B) the substitution and income effects.
• C) the substitution effect only.
• D) the income effect only.

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Definitions:

Communication

The process of exchanging information, ideas, or feelings between individuals or groups through verbal, non-verbal, written, or visual means.

Individualism-Collectivism

A dimension of culture that reflects the degree to which people in a society are integrated into groups, with individualism emphasizing personal goals and collectivism stressing the importance of group goals.

Triandis

Harry C. Triandis is a social psychologist known for his work on cultural psychology and the study of individualism and collectivism in shaping behavior and social relations.

Social Relations

Refers to the ways in which individuals interact and form connections with one another, influenced by social structures, norms, and cultural factors.