When the Price of a Normal Good Falls, the Substitution

question 413

Multiple Choice

When the price of a normal 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) a decrease; a decrease
• C) a decrease; an increase
• D) an increase; a decrease

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Definitions:

Functional Group

A specific grouping of atoms within molecules that have characteristic chemical reactions regardless of the molecules they are part of.

Structurally Isomeric

Pertains to molecules that have the same molecular formula but feature different physical structures.

Amines

Organic compounds and functional groups containing a basic nitrogen atom with a lone pair, deriving from ammonia by replacing one or more hydrogen atoms with organic groups.

Soluble

Capable of being dissolved in a solvent, such as a liquid, especially water.