When You Purchase the Lower-Priced Store Brand Bread Instead of the More

question 360

Multiple Choice

When you purchase the lower-priced store brand bread instead of the more expensive name brand, you are experiencing

• A) the substitution effect.
• B) the income effect.
• C) a fall in total utility.
• D) diminishing marginal product.

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Definitions:

Medium of Exchange

A go-between resource or framework designed to support the transfer, acquisition, or exchange of commodities among participants.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision.

Foregone Interest

The potential interest income lost by choosing an alternative investment or spending decision instead of the present option that yields interest.

FDIC Insurance

A federal guarantee of safety for depositor funds in member banks, up to a defined limit.