Use the following to answer question:
Figure 5.10
-(Figure 5.10) When the price of milk drops, the income effect _____ the quantity of milk consumed from _____.

Question

Use the following to answer question:
Figure 5.10 
-(Figure 5.10) When the price of milk drops, the income effect _____ the quantity of milk consumed from _____.

Quizplus · Accepted Answer

The income effect refers to the change in consumption resulting from a change in real income. When the price of milk drops, consumers effectively have more income to spend, leading to an increase in the quantity of milk consumed. The correct choice indicates an increase from 4 to 6 gallons.

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