Consider the Income and Substitution Effects of Price Changes

question 8

Multiple Choice

Consider the income and substitution effects of price changes.For a product with an income elasticity greater than one,a price increase will cause the consumer's real income to

• A)rise and the quantity purchased to fall.
• B)fall and the quantity purchased to fall.
• C)rise and the quantity purchased to rise.
• D)fall and the quantity purchased to rise.
• E)remain constant.