Multiple Choice
The table below shows the total utility associated with various units of goods X and Y.Table 7.5
-When the price of a good changes, the substitution effect occurs because:
A) the consumers' real income measured in terms of that good changes.
B) the relative price of that good changes compared to other goods in the consumption bundle.
C) the total utility of that good decreases.
D) the marginal utility of that good decreases.
E) consumers have an incentive to substitute irrational behavior for rational behavior.
Correct Answer:

Verified
Correct Answer:
Verified
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