When the price of a good falls, the consumer can buy the same quantity and still have money left. This is called

the substitution effectCorrect answerYour answerthe income effectCorrect answerYour answerthe law of supplyCorrect answerYour answera shift in demandCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

A lower price raises the consumer's real income, his purchasing power, which lets him buy more.

Concept: Income effect
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe demand schedule, curve and law

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When the price of a good falls, the consumer can buy the same quantity and still have money left. This is called

Explanation