For Normal Goods Like Cola and Pizza,what Happens Due to the Income

question 48

Multiple Choice

For normal goods like cola and pizza,what happens due to the income effect when the price of pizza falls

• A)There is a shift to a lower indifference curve, so the consumer buys more cola.
• B)There is a shift to a higher indifference curve, so the consumer buys more cola.
• C)There is movement along the indifference curve, so the consumer buys more cola.
• D)There is movement along the indifference curve, so the consumer buys less cola.

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Definitions:

Spot Rates

The current price at which a particular security, currency, or commodity can be bought or sold for immediate delivery.

Cash-Flow Hedge

A form of hedge accounting that protects against the variability in cash flows of a recognized asset or liability, or a forecasted transaction.

Other Comprehensive Income

Gains and losses that are not included in net income, but affect shareholders' equity, including items like unrealized gains or losses on foreign currency translations and on investment securities.

Forward Contract

A customized financial agreement between two parties to buy or sell an asset at a specified price on a future date, often used for hedging risks.