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If Pretzels Are a Normal Good, the Income Effect of a Price

Question 4

Multiple Choice

If pretzels are a normal good, the income effect of a price change means that


A) as income increases, the quantity demanded increases along the demand curve for pretzels
B) as income increases, the demand curve for pretzels shifts rightward
C) as income increases, the demand curve for pretzels shifts leftward
D) as the price of pretzels increases, the real income of individuals who demand pretzels decreases, so the quantity demanded of pretzels decreases
E) as the price of pretzels increases, income increases

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