Scenario 7-1 Use the Information Below to Answer the Following

question 162

Multiple Choice

Scenario 7-1 Use the information below to answer the following question(s) .
JoAnn considers cola and plain sparkling water to be good substitutes. Suppose the price of sugar, a key ingredient used to produce cola, falls.
Refer to Scenario 7-1. According to the income effect, which of the following is most likely to occur?

• A) JoAnn will purchase less cola and more sparkling water.
• B) JoAnn will purchase more cola and less sparkling water.
• C) JoAnn will purchase more of most goods due to her higher real income.
• D) JoAnn's demand curve will decrease (shift in), causing her to purchase less cola.

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Definitions:

Dextrose

A simple sugar made from corn, chemically identical to glucose, and often used in baking and medical scenarios.

Dextrose

A form of glucose used in medical settings as a source of energy and fluids.