Energy drinks and granola bars are normal goods. When the price of energy drinks decreases, the income effect causes
A)the consumer to feel richer, so the consumer buys more granola bars.
B)the consumer to feel richer, so the consumer buys fewer granola bars.
C)granola bars to be relatively more expensive, so the consumer buys more granola bars.
D)granola bars to be relatively less expensive, so the consumer buys fewer granola bars.

Question

Quizplus · Accepted Answer

When the price of energy drinks decreases, consumers feel as though they have more income, leading them to buy more of both normal goods, including granola bars.

Energy Drinks and Granola Bars Are Normal Goods