Assume That a College Student Purchases Only Coffee and Almonds

question 127

Multiple Choice

Assume that a college student purchases only coffee and almonds.If coffee is an inferior good and almonds are a normal good,what will the income effect associated with an increase in the price of almonds result in

• A)a decrease in the consumption of both almonds and coffee
• B)a decrease in the consumption of almonds and an increase in the consumption of coffee
• C)an increase in the consumption of both almonds and coffee
• D)an increase in the consumption of almonds and a decrease in the consumption of coffee

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Definitions:

Farm Price Supports

Government subsidies designed to maintain the income of farmers by stabilizing the prices of agricultural products.

Corporate Farms

Large-scale agricultural operations owned or operated by companies rather than individuals or families, often involved in intensive farming practices.

Agriculture

The practice of cultivating the soil, growing crops, and raising livestock for human consumption and use.

Productive Sectors

Parts of the economy that are directly involved in producing goods and services, contributing to the economic output.