Suppose the price of smoothies decreases, and the consumption bundle changes from point g to point h. The substitution effect leads to _____ granola bars and _____ smoothies, while the income effect leads to _____ of both goods.

A) more; less; less
B) more; less; more
C) fewer; more; more
D) fewer; more; less

Question

Suppose the price of smoothies decreases, and the consumption bundle changes from point g to point h. The substitution effect leads to _____ granola bars and _____ smoothies, while the income effect leads to _____ of both goods.

A) more; less; less 
B) more; less; more 
C) fewer; more; more 
D) fewer; more; less

Quizplus · Accepted Answer

The Answer of Suppose the price of smoothies decreases, and the consumption bundle changes from point g to point h. The substitution effect leads to _____ granola bars and _____ smoothies, while the income effect leads to _____ of both goods.

A) more; less; less 
B) more; less; more 
C) fewer; more; more 
D) fewer; more; less

Suppose the Price of Smoothies Decreases, and the Consumption Bundle