FIGURE 6- 3 -Refer to Figure 6- 3. for Both Goods, the Price

Multiple Choice

FIGURE 6- 3
-Refer to Figure 6- 3. For both goods, the price falls 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) luxury
B) normal
C) inferior
D) necessity
E) Giffen