Which Statement BEST Describes the Income Effect of a Price

question 91

Multiple Choice

Which statement BEST describes the income effect of a price increase?

• A)The price of bacon increases,so Michelle buys more sausage.
• B)The price of corn chips increases,so Michelle buys potato chips.
• C)The tuition at the public university increases,so Michelle attends a community college.
• D)Michelle's apartment rent increases,so she cancels her subscription to a monthly magazine.

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Definitions:

Reflex

A simple, automatic response to a sensory stimulus, such as the knee-jerk response.

Sensory Stimulation

Any activity that arouses one or more of the five senses: sight, sound, touch, taste, and smell, with the aim of enhancing learning or enjoyment.

Automatic Response

A behavior that is performed without conscious thought as a reaction to a specific stimulus.

Fetal Alcohol Syndrome

A condition in a child resulting from alcohol exposure during the mother's pregnancy, causing growth problems, facial abnormalities, and intellectual disabilities.