FIGURE 6-5
-Refer to Figure 6-5.For both goods,the price increases from P₀ to P₁.The substitution effect is illustrated by the change in quantity demanded from A to B; the income effect is illustrated by the change in quantity demanded from B to C.Good X is certainly a(n) ________ good.

Question

FIGURE 6-5 -Refer to Figure 6-5.For both goods,the price increases from P<sub>0</sub> to P<sub>1</sub>.The substitution effect is illustrated by the change in quantity demanded from A to B; the income effect is illustrated by the change in quantity demanded from B to C.Good X is certainly a(n) ________ good. A) normal B) inferior C) luxury D) necessity E) Giffen

Quizplus · Accepted Answer

The substitution effect shows a movement from A to B, indicating a change in quantity demanded due to a price change, while the income effect shows a movement from B to C. Since the quantity demanded decreases from B to C as income increases, Good X is an inferior good.

FIGURE 6-5 -Refer to Figure 6-5.For Both Goods,the Price Increases from P0

FIGURE 6-5 -Refer to Figure 6-5.For Both Goods,the Price Increases from P₀