Multiple Choice
Which of the following statements best describes the substitution effect?
A) The change in consumption resulting from a change in the consumer's income holding the prices of the goods constant.
B) The change in consumption resulting from a change in the consumer's income holding the consumer's level of satisfaction constant.
C) The change in consumption resulting from a change in the price of one good holding the consumer's level of satisfaction constant.
D) The change in consumption resulting from a change in the price of one good allowing the consumer's level of satisfaction to change.
Correct Answer:
Verified
Correct Answer:
Verified
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