Brian Is Very Upset Because He and His Girlfriend, Who

question 16

Multiple Choice

Brian is very upset because he and his girlfriend, who is only a few weeks into her pregnancy, just found out that caffeine is a(n) :

• A) hormone.
• B) antibiotic.
• C) psychiatric drug.
• D) psychoactive drug.

---

Definitions:

Normal Good

A product whose demand increases as consumer income rises, indicating a direct relationship between income and demand for the good.

Income Effect

The change in an individual's or economy's consumption patterns resulting from a change in real income.

Substitution Effect

The financial concept stating that when prices increase or incomes drop, individuals will substitute higher-priced goods with more affordable options.

Normal Goods

Goods for which demand increases as the income of consumers increases, and falls when consumer income decreases.