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Identify the Statement That Is True xx Increases
A)If X Is a Normal Good, Both the Income

Question 34

Multiple Choice

Identify the statement that is true. Assume that the price of good xx increases.


A) If x is a normal good, both the income and substitution effects lead to a fall in consumption of x.
B) The substitution effect leads to a decrease in consumption of x only if x is an inferior good.
C) If x is a normal good, the substitution effect alone leads to a decrease in consumption of x.
D) If x is an inferior good, the income effect alone leads to a decrease in consumption of good x.

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