Kizspy Question: 45
(Choose 1 answer)
Which of the following statements is correct?
A. When the price of a normal good increases, both the income and substitution effects encourage the
consumer to purchase more of the good.
B. When the price of a normal good increases, both the income and substitution effects encourage the
consumer to purchase less of the good.
C. When the price of a normal good increases, the income effect encourages the consumer to purchase
more of the good, and the substitution effect encourages the consumer to purchase less of the good.
D. When the price of a normal good increases, the income effect encourages the consumer to purchase less
of the good, and the substitution effect encourages the consumer to purchase more of the good.
