Which of the following statements is FALSE regarding consumer choice?
A) Each change in price has a substitution effect and a real income effect.
B) When price falls, the consumer chooses in favor of the cheaper good.
C) Diminishing marginal utility is one reason for a downward sloping demand curve.
D) Purchasing power has an inverse relationship with the rise in income.

Question

Quizplus · Accepted Answer

Purchasing power has a positive relationship with the rise in income. As a consumer's income increases, their purchasing power also increases, allowing them to purchase more goods and services.

Which of the Following Statements Is FALSE Regarding Consumer Choice