FIGURE 6- 4 -Refer to Figure 6- 4. for Both Goods, the Price

Multiple Choice

FIGURE 6- 4
-Refer to Figure 6- 4. For both goods, the price increases from P0 to P1. The substitution effect is illustrated by the change in quantity demanded from A to B; the income effect is illustrated by the change in quantity demanded from B to C. Good Y is certainly a(n) good.

A) normal
B) Giffen
C) luxury
D) necessity
E) inferior