Question

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The _______ effect says you will change your demand as rising prices make you feel poorer.

Question 4 options:

elasticity


technology


income


substitution

Answer 1

income,rising prices makes us feel poorer when prices increase, your budget wont buy as much as it used to, it feels as if you have less money. other goods. as income increases demand falls for these goods. your demand for a good that you will keep buying despite a price increase.

Answer 2

I believe it’s the income effect although not too sure because maybe differences in income will change prices ( either by making them rise or decrease ) and like said in the question make one feel poorer.