According to the Income Effect, an Increase in the Price

question 102

Multiple Choice

According to the income effect, an increase in the price of oranges will:

• A)​cause consumers to consume more apples because of greater savings on that good.
• B)​cause consumers to spend more on oranges because a higher price signals that oranges are better than apples.
• C)​cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges.
• D)​leave consumers with less real income to spend on all goods.

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