Asked by
Alexis Lorraine
on Dec 05, 2024
Verified
The substitution effect always entails a change in consumption in the _____ direction as (of) the change in _____.
A) same;marginal utility
B) same;price
C) opposite;price
D) opposite;the budget
Substitution Effect
The change in consumption resulting from a change in relative prices, leading consumers to substitute away from higher-priced goods towards lower-priced ones.
Price Change
An alteration in the cost to purchasers of goods and services over time or in response to supply and demand conditions.
- Explain the impact of substitution and income effects on the preferences and purchasing behavior of consumers.
Verified Answer
SS
Learning Objectives
- Explain the impact of substitution and income effects on the preferences and purchasing behavior of consumers.
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