When the price of a good changes,the change in consumption that leaves the consumer indifferent between the two choices is called the
A)normal effect.
B)substitution effect.
C)income effect.
D)price effect.
E)inferior effect.

Question

Quizplus · Accepted Answer

The change in consumption that leaves the consumer indifferent between the two choices when the price of a good changes is called the substitution effect. This effect refers to the consumer's ability to substitute one good for another as the price of one good changes relative to the other. The other options listed (normal effect, income effect, price effect, inferior effect) either do not describe the specific change in consumption resulting from a change in price, or are not commonly used terms in economics.

When the Price of a Good Changes,the Change in Consumption