The substitution effect of a price change: will always offset the income effect. will always result in the consumer buying less of a good at a higher price. dominates the income effect in the inferior good case. will always be lower than the income effect of the price change.
The substitution effect of a price change: will always offset the income effect. will always result in the consumer buying less of a good at a higher price. dominates the income effect in the inferior good case. will always be lower than the income effect of the price change.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 15SQ
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The substitution effect of a
- will always offset the income effect.
- will always result in the consumer buying less of a good at a higher price.
- dominates the income effect in the inferior good case.
- will always be lower than the income effect of the price change.
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