Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve In indifference curve theory, price effect is split into which two effects? Price effect and output effect Price effect and substitution effect Price effect and income effect Substitution effect and income effect Reveal answer Fill a bubble to check yourself D Correct answer Explanation The price effect describes the total change in consumption due to a price change. It is decomposed into the substitution effect (change due to relative price changes) and the income effect (change due to change in real purchasing power).