A price change would have the largest income effect on a
A) magazine.
B) desktop computer.
C) piece of clothing.
D) car.

Question

Quizplus · Accepted Answer

A price change would have the largest income effect on a car because it is a high-priced item, so a change in price would have a significant impact on the consumer's budget and purchasing power. The income effect refers to the change in consumer demand that results from a change in purchasing power due to a change in price.

A Price Change Would Have the Largest Income Effect on a