When the Price of a Normal Good Increases

question 93

Multiple Choice

When the price of a normal good increases,

• A)both the income and substitution effects encourage the consumer to purchase more of the good.
• B)both the income and substitution effects encourage the consumer to purchase less of the good.
• C)the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good.
• D)the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.

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Definitions:

Cat

A small domesticated carnivorous mammal with soft fur, a short snout, and retractile claws, widely kept as pets or for catching mice.

Animal

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