Assume that a college student purchases only coffee and Snickers bars.If both coffee and Snickers bars are normal goods,then the income effect associated with a decrease in the price of a Snickers bar will result in
A) a decrease in the consumption of Snickers bars and an increase in the consumption of coffee.
B) a decrease in the consumption of Snickers bars and a decrease in the consumption of coffee.
C) an increase in the consumption of Snickers bars and a decrease in the consumption of coffee.
D) an increase in the consumption of Snickers bars and an increase in the consumption of coffee.

Question

Quizplus · Accepted Answer

When the price of a Snickers bar decreases, the consumer's real income effectively increases, allowing them to purchase more of both normal goods: Snickers bars and coffee.

Assume That a College Student Purchases Only Coffee and Snickers