If the Price of Lattes, a Normal Good You Enjoy

question 114

Multiple Choice

If the price of lattes, a normal good you enjoy, falls, then

• A)the income and substitution effects offset each other but the price effect leads you to buy more lattes.
• B)both the income and substitution effects lead you to buy more lattes.
• C)the income effect which causes you to increase your latte consumption outweighs the substitution effect which causes you to reduce your latte consumption, resulting in more lattes purchased.
• D)the substitution effect which causes you to increase your latte consumption outweighs the income effect which causes you to reduce your latte consumption, resulting in more lattes purchased.

---

Definitions:

Ganglion Cells

Specialized neurons located in the retina that play a crucial role in transmitting visual information from photoreceptor cells to the brain.

Optic Nerve

The optic nerve is a bundled set of nerve fibers that transmits visual information from the retina to the brain, playing a critical role in vision.

Place Theory

A theory in hearing that suggests different areas of the cochlea are activated by different frequencies of sound, contributing to our perception of pitch.

Eardrum

A thin membrane that separates the outer ear from the middle ear and vibrates in response to sound waves.