The Change in Consumption That Results When a Price Change

question 183

Multiple Choice

The change in consumption that results when a price change moves the consumer along a given indifference curve to a point illustrating the new marginal rate of substitution is called the

• A)income effect.
• B)substitution effect.
• C)Giffen good effect.
• D)inferior good effect.

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Definitions:

Retained Earnings

Retained earnings are the accumulated net profits that a company chooses to keep rather than distribute to shareholders as dividends, often reinvested in the business.

Deficit

The shortfall that occurs when expenses exceed income or revenues.

IFRS

International Financial Reporting Standards, a set of accounting standards for financial reporting that is accepted globally.

Statement of Changes

A financial document that outlines the reasons for changes in equity, including transactions with owners and comprehensive income, over a period.