Which of the Following Statements About the Substitution Effect of a Price

question 229

Multiple Choice

Which of the following statements about the substitution effect of a price change is true?

• A)It is caused by a change in relative prices.
• B)It affects the consumer's ability, rather than willingness, to purchase a good.
• C)It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
• D)It is usually equal to the income effect.
• E)It may cause the consumer to buy less of the good when its price falls.

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Definitions:

Windows

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Symbolize

To represent something abstractly through another object, form, or idea, often found in art, literature, or symbols in mathematics and logic.

Statement Form

A type of logical expression that, when specific values are substituted for its variables, becomes a statement which can be either true or false.

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Scientists who study celestial bodies such as planets, stars, and galaxies.