If the price of the good measured on the horizontal axis falls,the substitution effect is indicated by movement to a
A)higher indifference curve.
B)lower indifference curve.
C)steeper part of the same indifference curve.
D)flatter part of the same indifference curve.
E)flatter part of a higher indifference curve.

Question

Quizplus · Accepted Answer

The substitution effect occurs when a price change causes a consumer to substitute one good for another, moving along the same indifference curve to a point where the curve is flatter, indicating a higher quantity of the cheaper good.

If the Price of the Good Measured on the Horizontal