Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts. Also, suppose that the consumer's income is €100. Suppose that the price of a pair of socks falls from €5 to €2. The substitution effect is represented by the movement from point?
A) Z to point X.
B) X to point Y.
C) X to point Z.
D) Y to point X.

Question

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts. Also, suppose that the consumer's income is €100. Suppose that the price of a pair of socks falls from €5 to €2. The substitution effect is represented by the movement from point? ​  ​
A) Z to point X. 
B) X to point Y. 
C) X to point Z. 
D) Y to point X.

Quizplus · Accepted Answer

The Answer of Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts. Also, suppose that the consumer's income is €100. Suppose that the price of a pair of socks falls from €5 to €2. The substitution effect is represented by the movement from point? ​  ​
A) Z to point X. 
B) X to point Y. 
C) X to point Z. 
D) Y to point X.