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Principles of Microeconomics

The following sample questions do not appear on an actual CLEP examination. They are intended to give potential test-takers an indication of the format and difficulty level of the examination and provide content for practice and review. For more sample questions and information about the test, see the CLEP Official Study Guide.

Question 3 of 8

When the price of a product increases, a consumer’s real income decreases, causing the consumer to decrease the quantity of the product demanded. This is known as

  • A.

    the substitution effect

  • B.

    the income effect

  • C.

    income elasticity

  • D.

    cross-price elasticity

  • E.

    diminishing marginal utility

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