What Happens If the Price of Muffins, a Normal Good

question 47

Multiple Choice

What happens if the price of muffins, a normal good that you enjoy, rises?

• A)The income and substitution effects offset each other, but the price effect leads you to buy fewer muffins.
• B)Both the income and substitution effects lead you to buy fewer muffins.
• C)The substitution effect which causes you to decrease your muffin consumption outweighs the income effect which causes you to increase your muffin consumption, resulting in fewer muffins purchased.
• D)The income effect which causes you to decrease your muffin consumption outweighs the substitution effect which causes you to increase your muffin consumption, resulting in fewer muffins purchased.

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Definitions:

Top-Level Executives

Senior managers holding pivotal positions in a company, responsible for strategic decisions and overall management.

Social Zone

An area or space that fosters social interaction among individuals, often within a workplace or public setting.

Personal Zone

Pertains to the physical space immediately surrounding an individual, often regarded in the context of social distance and interpersonal communication.

Intimate Zone

The physical space immediately surrounding someone, into which encroachment can feel uncomfortable or threatening unless you're intimately close.