Higher education is a normal good. If its price falls,
A)the quantity demanded of higher education will fall.
B)the substitution and income effects work in opposite directions.
C)the income effect is positive.
D)higher education will be a Giffen good.

Question

Quizplus · Accepted Answer

When the price of a normal good falls, the income effect is positive, meaning consumers feel effectively richer and thus demand more of the good.

Higher Education Is a Normal Good