Multiple Choice
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.
Correct Answer:
Verified
Correct Answer:
Verified
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