Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the income effect associated with a decrease in the price of a textbook will result in
a. a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
b. a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles.
c. an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles.
d. an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
d
You might also like to view...
Which of the following factors would decrease in the quantity of investment demanded?
A. A decrease in business taxes B. An increase in the rate of technological change C. An increase in the interest rate D. A decrease in the stock of capital goods on hand
The total product curve shows the relationship between total product and
A) cost. B) the quantity of labor. C) the average product. D) the marginal product. E) the marginal cost.
Since 1933, bank failures have occurred
a. frequently b. very rarely c. once every 3 years d. every year e. once every 5 years
The In the News article titled "Men vs. Women: How They Spend" differentiates the spending habits of women and men: "Men spend almost twice as much as women do on electronic equipment … young women spend twice as much money on clothing, personal care items, and their pets." Which determinant of demand is most likely involved?
A. Other goods (availability and prices). B. Income. C. Tastes. D. Expectations.