Nick Considers Macaroni and Cheese to Be an Inferior Good

Multiple Choice

Nick considers macaroni and cheese to be an inferior good. As a result of macaroni and cheese being an inferior good, the

A) substitution effect must be larger in magnitude than the income effect so that less is purchased as the price falls.
B) substitution effect must be smaller in magnitude than the income effect so that less is purchased as the price falls.
C) income effect is positive, so that more is purchased as income increases.
D) income effect is negative, so that less is purchased as income increases.