When the price of a good falls, the income effect for a normal good implies that people buy
A) less of that good because the relative price of the good has fallen.
B) more of that good because the relative price of the good has risen.
C) less of that good because they cannot afford to buy all the things they previously bought.
D) more of that good because they can afford to buy more of all the things they previously bought.
Correct Answer:
Verified
Q38: When the price of a pizza decreases
Q39: The law of demand states that the
Q40: Which of the following is consistent with
Q41: Suppose people buy more of good 1
Q42: People buy more of good 1 when
Q44: Apples are a normal good, so if
Q45: The quantity of iPads that people plan
Q46: In the market for magazines, the "income
Q47: The "income effect" in the market for
Q48: For normal goods which of the following
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