When the price of one good decreases, a consumer's purchasing power for all goods increases, which results in:
A) the substitution effect.
B) a susceptibility to framing.
C) bounded willpower.
D) the income effect.

Question

Quizplus · Accepted Answer

The income effect occurs because a decrease in the price of a good effectively increases a consumer's purchasing power, allowing them to buy more goods in total with the same amount of money.

When the Price of One Good Decreases, a Consumer's Purchasing