When the Price of a Normal Good Rises, the Income

question 270

Multiple Choice

When the price of a normal good rises, the income effect results in ________ in the quantity demanded and the substitution effect results in ________ in the quantity demanded.

• A) an increase; an increase
• B) an increase; a decrease
• C) a decrease; an increase
• D) a decrease; a decrease

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Definitions:

Written Title

This term refers to a document or certification indicating ownership or the right to hold a property, piece of land, or creative work.

Levy Taxes

The act of imposing taxes by a government or authority on its citizens or subjects.

Two-Chambered Body

A legislative structure consisting of two separate houses or chambers, typically a lower and an upper house, involved in the law-making process.

Regulate Commerce

The authority given to governments, especially under the U.S. Constitution, to dictate and oversee trade agreements, practices, and legislation both domestically and with foreign nations.