Solved

The Price of a Large Pepperoni Pizza Used to Be

Question 406

Multiple Choice

The price of a large pepperoni pizza used to be $12, but this week the price rose to $18. With a budget of just $28, you can't afford as many pizzas at the higher price. This change in consumer behavior reflects the


A) real income effect.
B) substitution effect.
C) nominal income effect.
D) concept of diminishing marginal utility.

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