The income effect of a price change predicts that a to a(n) in the consumption of rise; decrease; increase; inferior rise; decrease; decrease; inferior fall; decrease; decrease; normal fall; increase; increase; inferior goods. in a good's price will consumer purchasing power, leading

Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?

If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?