Question

Suppose that the price of a good decreased. The substitution effect shows the change in consumption for all goods in reaction to a change in _____________ relative prices income preferences holding _____________ purchasing power utility constant.

Answer 1

Answer:

The correct answer is "relative prices; utility". A further explanation is provided below.

Explanation:

• The conditions of a connection or bond between variables customer demand or perhaps the proportion of such a given cost of production to the normal distribution of so many other products available throughout the marketplace.
• Individual's pleasure is usually measured by the consumption of that same goods and services.

Thus the above is the correct answer.