Multiple Choice
Assume that a college student purchases only coffee and Snickers.If both coffee and Snickers are normal goods,then the income effect associated with a decrease in the price of a Snickers will result in
A) a decrease in the consumption of Snickers and an increase in the consumption of coffee.
B) a decrease in the consumption of Snickers and a decrease in the consumption of coffee.
C) an increase in the consumption of Snickers and a decrease in the consumption of coffee.
D) an increase in the consumption of Snickers and an increase in the consumption of coffee.
Correct Answer:
Verified
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B)MUₓ/Pᵧ
Q130: Figure 21-7
