The Income Effect of a Price Change Refers to

question 45

Multiple Choice

The income effect of a price change refers to

• A)the change in demand that occurs when consumer income changes.
• B)the change in the quantity demanded that results from a change in price, making the good more or less expensive relative to other goods, holding everything else constant.
• C)the change in demand that occurs when both income and price change.
• D)the change in the quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant.

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Definitions:

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Circular Definitions

Definitions that use the term being defined as part of its own definition, leading to a logical fallacy.

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Essential Attributes

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