Suppose the price of a good rises. The income effect

A) shows the change in consumption that results from the change in relative price while staying on the same indifference curve.
B) shows the change in consumption that results from the change in relative price while keeping income constant.
C) is shown by decreasing income at the new relative price in order to move from the old indifference curve to the new indifference curve after the price change.
D) is shown by increasing income at the new relative price in order to move from the old indifference curve to the new indifference curve after the price change.

C

Economics

You might also like to view...

Inducements to act in particular ways are called

A) collusive tactics. B) incentives. C) trade-offs. D) opportunity costs.

Economics

Cartels are inherently unstable

a. True b. False

Economics