Cashews and asparagus are normal goods. When the price of asparagus falls, the substitution effect by itself causes
A)the consumer to feel richer, so the consumer buys more cashews.
B)the consumer to feel richer, so the consumer buys less cashews.
C)cashews to be relatively more expensive, so the consumer buys less cashews.
D)cashews to be relatively less expensive, so the consumer buys more cashews.

Question

Quizplus · Accepted Answer

When the price of asparagus falls, asparagus becomes relatively cheaper compared to cashews, leading consumers to substitute asparagus for cashews, thus buying less cashews.

Cashews and Asparagus Are Normal Goods