The Income Effect of an Increase in the Price of Backpacks

question 37

Multiple Choice

The income effect of an increase in the price of backpacks, a normal good, is a(n) _____

• A) decrease in the demand for backpacks.
• B) decrease in the quantity of backpacks demanded.
• C) decrease in the supply of backpacks.
• D) increase in the quantity of backpacks demanded.
• E) increase in the quantity of backpacks supplied.

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Definitions:

Closing Fees

Charges and costs associated with the finalization of a real estate transaction or the closing of a loan.

Itemize Deductions

The process of listing allowable expenses that can be subtracted from adjusted gross income to reduce taxable income.

Property Taxes

Taxes paid by property owners, based on the assessed value of their property, to fund local public services.

Charitable Contributions

Donations or gifts made to qualified organizations, which may be deductible from an individual's income tax.