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If the Price of a Good Decreases, the Substitution Effect

Question 24

Multiple Choice

If the price of a good decreases, the substitution effect


A) can increase or decrease the quantity of the good demanded.
B) shows the increase in the quantity of the good demanded, holding income constant.
C) shows the increase in the quantity of the good demanded, holding utility constant.
D) must be greater than the income effect.
E) is positive since the quantity of the good increases.

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