Figure 4A

-The income effect in Figure 4A is from:
A)point F to point H.
B)point A to point C.
C)point E to point F.
D)point E to point H.

Question

Figure 4A

-The income effect in Figure 4A is from:
A)point F to point H. 
B)point A to point C. 
C)point E to point F. 
D)point E to point H.

Quizplus · Accepted Answer

The income effect is the change in quantity demanded due to a change in income. In Figure 4A, the income effect is from point F to point H because this is the change in quantity demanded due to the change in income from Y1 to Y2.

Figure 4A -The Income Effect in Figure 4A Is From