Use the Following to Answer Questions

question 2

Multiple Choice

Use the following to answer questions :
-(Figure: Income and Substitution Effects) Use Figure Income and Substitution Effects.Carlos is originally consuming his optimal consumption bundle at point A when the price of gasoline falls.The movement from K₁ to K₂ reflects the _____ the decrease in the price of gasoline.

• A) total change in quantity demanded due to
• B) income effect of
• C) substitution effect of
• D) income and substitution effects of

---

Definitions:

Negotiation Process

The series of actions taken to reach an agreement or solve a problem through discussion between parties.

Ground Rules

Agreed-upon guidelines or principles set by a group to govern individual behavior and group interactions during meetings or collaborative efforts.

Formal Agreement

A legally binding contract or arrangement specified in a formal document between parties.

Affect-based

Relating to, influenced by, or arising from emotions or feelings rather than logical reasoning or factual evidence.