The consumer makes the best affordable choice and then the price of one good rises. Which of the following statements must be correct?

Question

Accepted Answer

The substitution effect of the price rise is negative.

Answer

The substitution effect of the price rise is positive.

Answer

The income effect of the price rise is positive.

Answer

The income effect of the price rise is zero.

Answer

The income effect of the price rise offsets the substitution effect.

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