Asked by
Cheyenne Taylor
on Oct 09, 2024
Verified
When the price of a product increases,a consumer is able to buy less of it with a given money income.This describes the:
A) cost effect.
B) inflationary effect.
C) income effect.
D) substitution effect.
Income Effect
The change in consumption resulting from a change in real income, which can itself result from changes in wages or prices.
Money Income
The total amount of monetary earnings or receipts a person or household receives from various sources including wages, dividends, and benefits.
Product Increases
Situations in which the output or availability of goods and services in the market expands.
- Learn the association between changing prices and the resulting quantity demanded, facilitated by the substitution and income effects.
Verified Answer
MG
Learning Objectives
- Learn the association between changing prices and the resulting quantity demanded, facilitated by the substitution and income effects.