Which of the following statements is false?
A.The income effect of normal goods counters the substitution effect, so the demand curve slopes upward.
B.The income effect and the substitution effect reinforce each other when there are price changes for a normal good.
C.The income effect represents the decrease in quantity demanded caused by the implicit change in income due to a fall in the price of an inferior good but not of a normal good.
D.The substitution effect represents the change in quantity demanded solely because of a change in the relative price of a good.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is false?
A.The income effect of normal goods counters the substitution effect, so the demand curve slopes upward.
B.The income effect and the substitution effect reinforce each other when there are price changes for a normal good.
C.The income effect represents the decrease in quantity demanded caused by the implicit change in income due to a fall in the price of an inferior good but not of a normal good.
D.The substitution effect represents the change in quantity demanded solely because of a change in the relative price of a good.

Which of the Following Statements Is False