What occurs when a price changes and consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price?
a. Budget constraint
b. Consumer equilibrium
c. Substitution effect
d. Income effect
c. Substitution effect
The substitution effect occurs when a price changes and consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price.
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Although asset price bubbles seem obvious after the fact, it is much more difficult to draw such a conclusion before the fact
a. True b. False Indicate whether the statement is true or false
Economists use the term "business cycle" to refer to
a. the growth of small businesses into major corporations. b. changes in products that occur from improved technology. c. fluctuations in the level of real output and employment. d. periods of increases and decreases in the rate of inflation.