The Substitution Effect Argues That a Consumer

Multiple Choice

The substitution effect argues that a consumer

A) will always use the additional purchasing power from a price decrease to purchase more of both goods.
B) will not purchase more of a good when its price falls.
C) will purchase more of a good that has become relatively cheaper, and less of a good that has become relatively more expensive.
D) will purchase less of both goods if his or her real income increases.