Consider the Situation Depicted in Figure 4

question 3

Multiple Choice

Consider the situation depicted in Figure 4.2,where the worker experiences a decrease in her wage.Her initial budget constraint is B0D,and following the decrease her new budget constraint is B1D.The move from to is the substitution effect,and the move from to is the income effect.

• A) R,P,Q,R
• B) R,Q,Q,P
• C) Q,R,P,Q
• D) P,Q,Q,R
• E) R,P,P,Q

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