Exhibit 6-31 Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31.Then the price of good B falls.The movement from point a to point b represents
A)the substitution effect
B)the income effect
C)the substitution effect minus the income effect
D)the sum of the substitution and income effects
E)the income effect minus the substitution effect

Question

Exhibit 6-31  Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31.Then the price of good B falls.The movement from point a to point b represents
A)the substitution effect 
B)the income effect 
C)the substitution effect minus the income effect 
D)the sum of the substitution and income effects 
E)the income effect minus the substitution effect

Quizplus · Accepted Answer

The Answer of Exhibit 6-31  Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31.Then the price of good B falls.The movement from point a to point b represents
A)the substitution effect 
B)the income effect 
C)the substitution effect minus the income effect 
D)the sum of the substitution and income effects 
E)the income effect minus the substitution effect

Exhibit 6-31 Assume That a Consumer Is Initially in Equilibrium