Question : The concept of the income effect is based on changes in:

Option 1: Consumer preferences

Option 2: Consumer Income

Option 3: Consumer prices

Option 4: Consumer savings

Question : Law of Demand violations include:

Option 1: Substitution effect is negative

Option 2: Income effect is negative

Option 3: Negative income effect is less than substitution effect

Option 4: Negative income effect is greater than substitution effect

Question : The concept of the budget line is based on:

Option 1: Consumer preferences

Option 2: Consumer income

Option 3: Consumer prices

Option 4: All of the above

Question : The main effect of direct taxes is on:

Option 1: food prices

Option 2: consumer goods

Option 3: capital goods

Option 4: income

Question : Statement 1: The substitution effect occurs when a consumer switches from one good to another due to a change in relative prices.

Statement 2: The income effect refers to the change in quantity demanded of a good due to a change in the consumer's purchasing power.

Option 1: Statement 1 is true, and statement 2 is false.

Option 2: Statement 1 is false, and statement 2 is true.

Option 3: Both statement 1 and statement 2 are true.

Option 4: Both statement 1 and statement 2 are false.