1. Business
  2. Economics
  3. question 7 te se ie when the price of good...

Question: question 7 te se ie when the price of good...

Question details

QUESTION 7 TE, SE, IE. When the price of good 1 decreases, the following is true (select all that applies; O a If good 1 is a normal good, then the substitution effect leads to increase in consumption of t. 1 poi b. If good 1 is an inferior good, then the substitution effect leads to decrease in consumption of it. O C If good 1 is a normal good, then the income effect leads to decrease in consumption of it. 回d. If good 1 is an inferior good, then the income effect leads to decrease in consumption of it. O e. As long as good 1 is an inferior good, the total effect always leads to a decrease in consumption of it. O f. If total effect leads to decrease in consumption of good 1, then income effect must also lead to decrease in consumption of it.
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution