Multiple Choice
Use the following to answer questions:
Figure: Income and Substitution Effects
-(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. The movement from K2 to K3 reflects the _____ the decrease in the price of gasoline.
A) total change in quantity demanded due to
B) income effect of
C) substitution effect of
D) income and substitution effects of
Correct Answer:

Verified
Correct Answer:
Verified
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