Steak is a normal good.A decrease in the price of steak
A)causes the budget line to rotate inward
B)makes the supply of steak more elastic
C)decreases consumers' purchasing power
D)makes consumers poorer
E)increases consumers' purchasing power

Question

Quizplus · Accepted Answer

As steak is a normal good, a decrease in its price would increase consumers' purchasing power. This means that with the same amount of money, consumers can buy more steak or the same amount at a cheaper price. Therefore, the answer is E, which states that a decrease in the price of steak increases consumers' purchasing power.

Steak Is a Normal Good