9) Your friend Raffi, who has a fixed income in dollars, consumes both apples and bananas. Suppose that his demand for each good increases with income (i.e. both are normal goods). When the price of apples increases: Select one answer, and explain why each answer is right or wrong

1. The substitution effect says he will consume more apples, as Raffi would have to increase his expenditure on apples due to their higher price.
2. The income effect says Raffi would consume fewer bananas.
3. If the income effect dominates the substitution effect, then Raffi would consume more bananas.
4. If the income effect dominates the substitution effect, then Raffi would consume more apples