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Author Question: When the price of a good falls, the income effect for a normal good implies that people buy A) ... (Read 164 times)

LaDunn

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on: Jun 29, 2018
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.

Question 2

When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.
 
  A) an increase; an increase
  B) an increase; a decrease
  C) a decrease; an increase
  D) a decrease; a decrease


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6ana001

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Reply #1 on: Jun 29, 2018
Answer to Question 1

You are a life saver.

Answer to Question 2

B


LaDunn

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Reply 2 on: Jun 29, 2018
Wow, this really help

sailorcrescent

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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