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The chapter states that: When the price of good falls, theincomeLOADING... and substitutionLOADING... effects work This statement means: Part 2 A.If the price of
The chapter states that: "When the price of good falls, theincomeLOADING... and substitutionLOADING... effects work " This statement means: Part 2 A.If the price of an inferior good falls comma the income effect will increase quantity demanded while the substitution effect will increase quantity demanded comma so these two effects are in the same direction. B.If the price of a normal good falls comma the income effect will increase quantity demanded while the substitution effect will decrease quantity demanded comma so these two effects are in opposite direction. C.If the price of a normal good falls comma the income effect will increase quantity demanded while the substitution effect will increase quantity demanded comma so these two effects are in the same directions. D. The income and substitution effects are different names for the same thing
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