Suppose Potatoes Are an Inferior Good and the Price of Potatoes

question 120

Multiple Choice

Suppose potatoes are an inferior good and the price of potatoes decreases.Then:

• A)the substitution effect will cause a decrease in the consumption of potatoes.
• B)the income effect will cause an increase in the consumption of potatoes.
• C)the income effect will cause a decrease in the consumption of potatoes.
• D)the substitution effect will cause an decrease in the consumption of potatoes and the income effect will cause a decrease in the consumption of potatoes