For which of the following goods is a price increase likely to lead to a substantial income (as well as substitution) effect? a. Salt b. Housing C. Theater tickets d. Food

a. Describe according to demand theory why an inferior good or service you have consumed now or in the past is such. b. What do you expect would happen to your consumption of it when your income changed in either direction?

For most goods if a consumer's income increases his demand for the goods will do what?

Question 3

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?    A. substitute goods  B. complementary goods  C. normal goods  D. inferior goods

If two goods are substitutes, a decline in the price of one will cause an increase in the demand for the other.  A.True B.False