Multiple Choice
The price of potatoes falls,and the quantity of potatoes purchased decreases.What can we infer?
A) The income effect is negative and exceeds the substitution effect.
B) The income effect is negative and reinforces the substitution effect.
C) The income effect is positive and exceeds the substitution effect.
D) The income effect is positive and reinforces the substitution effect.
E) The income effect is negative and just about offsets the substitution effect.
Correct Answer:
Verified
Correct Answer:
Verified
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