If pretzels are a normal good, what does the income effect of a price change in pretzels mean?
A) As income increases, the quantity demanded increases along the demand curve for pretzels.
B) As income increases, the demand curve for pretzels shifts rightward.
C) As income increases, the demand curve for pretzels shifts leftward.
D) As the price of pretzels increases, the real income of individuals who demand pretzels decreases, so the quantity demanded of pretzels decreases.
Correct Answer:
Verified
Q10: What does the law of demand state
Q11: What type of demand curve illustrates the
Q12: For which of the following would the
Q13: What is the income effect of an
Q14: Suppose you drink more tea because the
Q16: Which statement best explains the substitution effect
Q17: What does the substitution effect of a
Q18: What are movements along a demand curve
Q19: Suppose apartment rents increase.What impact will the
Q20: What does the law of demand assume
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents