FIGURE 6-4 -Refer to Figure 6-4.For Both Goods,the Price Falls from P₀

question 65

Multiple Choice

FIGURE 6-4
-Refer to Figure 6-4.For both goods,the price falls from P₀ to P₁.The substitution effect is illustrated by the change in quantity demanded from A to B; the income effect is illustrated by the change in quantity demanded from B to C.Good Y is certainly a(n) ________ good.

• A)normal
• B)inferior
• C)luxury
• D)necessity
• E)Giffen

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Definitions:

Offeror

The party in a contractual agreement who makes an offer to enter into a contract, awaiting acceptance by the offeree.

Stipulates

Specifies expressly, setting out terms or conditions clearly within an agreement or document.

Effective Upon Dispatch

A legal principle stating that an offer, acceptance, or revocation becomes effective when it is sent, not when it is received.

Specified

Clearly identified or defined in detail.