If a Good Is Normal, Then

question 12

Multiple Choice

If a good is normal, then:

• A)the income effect is larger than the substitution effect.
• B)the income effect moves in the same direction as the substitution effect.
• C)the income effect moves in the opposite direction of the substitution effect.
• D)the income and substitution effects are ambiguous.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level.

Price of Oil

The cost per barrel of crude oil as determined by global markets and supply-demand dynamics.

Quantity of Oil

The total volume or amount of oil available or in production at a given time.

Complements

Products or services that complement each other, such that a rise in the demand for one results in a rise in the demand for its counterpart.