The substitution effect
A) is always larger than the price effect.
B) always decreases purchases of a good as the price of a good rises.
C) increases purchases of the good as the price rises if the good is a normal good.
D) is always smaller than the income effect.
B
Economics
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In the long-run, if firms in a perfectly competitive market are incurring persistent economic losses, some firms will
A) exit and the price will fall. B) exit and the price will rise. C) enter and the price might either rise or fall. D) exit and the price might either rise or fall.
Economics
The income of a typical worker in a country is most closely linked to which of the following?
a. population b. productivity c. market power d. government policies
Economics