When the price of a normal good decreases, people buy ________ of the good due to ________.
A) more; the substitution effect only
B) more; the substitution and income effects
C) less; the substitution effect only
D) less; the income effect only
Question 2
Suppose your neighbor has a beautiful garden. The benefit that she enjoys from her garden is called ________ and the benefit the rest of the neighborhood enjoys is called ________.
A) marginal private benefit; marginal external benefit
B) private cost; external cost
C) marginal social benefit; marginal external benefit
D) marginal external benefit; marginal social benefit
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