When the Price of a Good Falls, the Income Effect

question 458

Multiple Choice

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.

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Definitions:

Tunica Intima

The innermost layer of an artery or vein, consisting of a thin layer of endothelial cells that line the interior surface of the vessel.

Blood Vessel Walls

The structured layers composing the sides of arteries, veins, and capillaries, responsible for maintaining blood pressure and controlling blood flow.

Tunica Media

The middle layer of the wall of a blood vessel or hollow organ, consisting primarily of smooth muscle cells and elastic fibers.

Pulmonary Circulation

The passage of blood from the heart to the lungs and back to the heart, where it is oxygenated and rid of carbon dioxide.