For a normal good,the
A)income effect is greater than 1.0
B)income effect is negative
C)substitution effect is zero
D)income effect and the substitution effect work in the same direction
E)demand curve is horizontal

Question

Quizplus · Accepted Answer

For a normal good, both the income effect (increase in income leads to increase in quantity demanded) and substitution effect (price decrease leads to increase in quantity demanded) work in the same direction, leading to an overall increase in quantity demanded.

For a Normal Good,the