Exam Question
The income effect of a price increase of a normal good is to…of that good and the substitution effect is to…of that good
- 1. increase quantity demanded, reduce quantity demanded
- 2. increase quantity demanded, increase quantity demanded
- 3. reduce quantity demanded, reduce quantity demanded
- 4. reduce quantity demanded, increase quantity demanded
View Answer
Answer 3. reduce quantity demanded, reduce quantity demanded
Practice set and Exam Quiz
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