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wrote...
Posts: 75
2 weeks ago

Question 1.

The change in people's purchasing power that occurs when the price of one good that they purchase changes is the

• substitution effect.

• real-income effect.

• price income effect.

• law of diminishing marginal utility.

Question 2.

If the price of a slice of pizza falls from $2 to $1.5, a pizza-loving consumer will

• substitute more Chinese food for pizza.

• spend more on soft drinks and less on pizza.

• see her purchasing power rise.

• see her purchasing power fall.
Source  Download
Economics Today: The Micro View
Edition: 19th
Author:
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Answer verified by a subject expert
wrote...
Posts: 60
Rep: 5 0
2 weeks ago
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Answer 1

real-income effect.

Answer 2

see her purchasing power rise.
1
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