Suppose that Jeanna's income rises. If tomatoes are a normal good, what will happen to the quantity of tomatoes purchased by Jeanna? Is this an income effect, a substitution effect, or both? Explain
What will be an ideal response?
Jeanna will purchase more tomatoes if her income rises because tomatoes are a normal good. This is an income effect. Her income has increased, so she is better off. There is no substitution effect in this case because there is no change in relative prices.
Economics
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