Normal goods always obey the law of demand because, as the price of such a good rises, the
a. fall in quantity demanded due to the substitution effect is offset by a rise in quantity demanded due to the income effect
b. fall in quantity demanded due to the substitution effect is reinforced by a fall in quantity demanded due to the income effect
c. substitution effect will lead to an inward shift of the demand curve
d. substitution effect will lead to an increase in quantity demanded
e. rise in quantity demanded due to the substitution effect is offset by a fall in quantity demanded due to the income effect
B
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A return to the gold standard, that is, using gold for money will ________ the ________ for gold, ________ its price, everything else held constant
A) increase; demand; increasing B) decrease; demand; decreasing C) increase; supply; increasing D) decrease; supply; increasing
Max has allocated $100 toward meats for his barbecue. His budget line and indifference map are shown in the above figure. If Max is currently at point d,
A) the absolute value of his MRS is larger than the trade-off offered by the market. B) he is willing to give up more chicken than he has to, given market prices. C) he is not maximizing his utility. D) All of the above.