Multiple Choice
Suppose a consumer can purchase only two goods, soap and apples. If the price of soap falls and the consumption of apples increases, we can conclude that the increased consumption of apples is due to
A) the income effect only.
B) both the income effect and the substitution effect.
C) the deflation effect.
D) neither the income effect nor the substitution effect.
E) the substitution effect only.
Correct Answer:
Verified
Correct Answer:
Verified
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