In general, the income effect of an increase in the price of a normal good will cause an individual to buy _____ of that good because he or she has relatively _____ income.
A)more; more
B)less; less
C)more; less
D)less; more

Question

Quizplus · Accepted Answer

The income effect of a price increase for a normal good implies that the consumer feels relatively poorer because their purchasing power decreases, leading them to buy less of the good.

In General, the Income Effect of an Increase in the Price