The figure illustrates Elijah's preferences. He is currently at point A. The price of pizza decreases. The move from point A to point ________ is the substitution effect and the move from point ________ to point ________ is the income effect.
A) B; B; C
B) E; E; C
C) D; D; B
D) C; C; B
Question 2
The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, what is the price of college education?
A) 8,000 per year
B) 12,000 per year
C) 14,000 per year
D) 16,000 per year
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Figure 2.15.jpg