What term describes the effect of a change in price on the amount of that good demanded by a consumer?

The correct term that describes the effect of a change in price on the amount of a good demanded by a consumer is the substitution effect. This effect arises when consumers alter their purchasing decisions due to a price change, opting for a relatively cheaper substitute when the price of the good in question rises. Conversely, if the price of the good decreases, consumers may shift their purchasing decisions away from more expensive substitutes. This reflects consumer behavior as they try to maximize their utility given their budget constraints.

For instance, if the price of coffee increases, some consumers may start buying tea instead, which serves as a substitute for coffee. This behavior illustrates the substitution effect at work, highlighting how consumers react to price changes by adjusting the quantity demanded for the good compared to other similar alternatives.

The other concepts, such as the income effect, pertain to how a change in the price of a good affects the purchasing power of consumers, leading them to buy more or less of a good based on their overall income level, while a demand shift involves a change in demand due to factors other than price, such as consumer preferences or number of buyers. Understanding these dynamics helps in analyzing consumer choices and market behaviors effectively.