Discounting principle. - Discounting principle: Discounting principle refers to a rule of Attribution which states that the perceived role of a cause will be discounted or reduced if other plausible causes are also present.
The Poisson Effect When a tensile stress is applied to a material, the material elongates in the direction of the applied stress, and contracts perpendicular to the direction of the applied stress. This relationship, called the Poisson effect, is a natural response to applied stress that occurs with all materials, but is particularly apparent with ductile materials. For example, when a metal bar is pulled in a tensile test, it stretches out and necks down on. the sides.
6 16 Substitution Effect â¢ The substitution effect caused by a change in price from p 1 to p 1 'can be computed using the Hicksian demand function:Sub. Effect = h1(p1 ', p2,U) âh1(p1, p 2, U) 17 Income Effect U 1 U 2 Quantity of x 1 Quantity of x 2 A Now letâs keep the relative prices constant at the new level.