graph TD;
	    A[Increase in Beef Prices] --> B[Decrease in Beef Consumption];
	    B --> C[Increase in Chicken Consumption];

## What happens to the quantity demanded of beef when its price increases? - [x] It decreases as consumers switch to chicken - [ ] It stays the same - [ ] It increases because everyone suddenly loves beef - [ ] It decreases but only if you send a strongly worded letter to your butcher > **Explanation:** When the price of beef rises, consumers look for cheaper alternatives, such as chicken. ## Which is likely to have a stronger substitution effect? - [x] Two brands of soda - [ ] A car and a bicycle - [ ] A gourmet restaurant and a three-star diner - [ ] Apples and a spaceship > **Explanation:** The substitution effect is strongest between products that can substitute well for one another, like sodas. ## If consumer income increases, how does that affect the substitution effect? - [ ] It disappears completely - [x] It may weaken as consumers can afford more expensive options - [ ] It strengthens since now people have more choices - [ ] It has no effect, because income is unrelated to purchasing decisions > **Explanation:** An increase in consumer income usually means they might buy the more expensive option that was previously out of reach. ## True or False: The substitution effect is only relevant for luxury goods. - [ ] True - [x] False > **Explanation:** The substitution effect applies to various products, not just luxuries. Everyone loves a good deal! ## If the price of tea rises, what effect would it likely have on coffee consumption? - [ ] Coffee consumption goes up - [x] Coffee consumption also likely goes up - [ ] No impact at all - [ ] Coffee becomes rarer than diamonds > **Explanation:** As tea becomes more expensive, consumers may switch to coffee, which is a close substitute. ## What typically motivates the substitution effect? - [ ] Desire for fancy brand names - [ ] Guilt from past purchases - [x] Frugality and cost-effectiveness - [ ] Boredom with existing products > **Explanation:** The substitution effect generally reflects consumers' response to increased prices by seeking less expensive alternatives. ## A product with no close substitutes is likely to experience what with a price increase? - [ ] Increase in demand - [ ] No change in demand - [x] Decrease in demand - [ ] A surprise sale > **Explanation:** While unique items like rare collectibles might not see an immediate switch, a price increase often leads to lower demand as consumers might be pushed to find alternatives. ## What best describes the relationship between income effect and substitution effect? - [x] They can work together to influence consumer choices - [ ] They are the same thing - [ ] They act completely independently - [ ] They only apply to groceries > **Explanation:** Both effects can influence how consumers decide what to purchase, particularly when prices change or incomes fluctuate. ## In one sentence, what can cause the substitution effect? - [ ] A spiking interest in cooking - [ ] The price of cats reaching unreasonably high levels - [x] Price increases of a particular product - [ ] The advent of self-driving cars > **Explanation:** Yes! When the price of one good goes up, consumers tend to buy more of another good that serves as a substitute. ## In the context of the substitution effect, what is an "inferior good"? - [x] A good that people buy more of when their income decreases - [ ] A product no one wants to buy, regardless of price - [ ] An item on clearance that is still more expensive than new goods - [ ] A brand of designer clothing > **Explanation:** An inferior good is one that sees greater demand as consumer incomes fall, stemming from a budget aversion.