The effect of an increase in income when both goods are normal is to [...]
Answer
increase the consumption of both.
If you want to change selection, open original toplevel document below and click on "Move attachment"
Parent (intermediate) annotation
Open it The effect of an increase in income when both goods are normal is to increase the consumption of both.
Original toplevel document
5. CONSUMER EQUILIBRIUM: MAXIMIZING UTILITY SUBJECT TO THE BUDGET CONSTRAINT it 12 indicates such a shift and shows how the consumer would respond, in this case, by buying more of both bread and wine.
Exhibit 12. The Effect of an Increase in Income on a Normal Good
Note: <span>The effect of an increase in income when both goods are normal is to increase the consumption of both.
As we discovered, there is no restriction that the purchase of every good must respond to an increase in income with an increase in quantity. There, we defined
Summary
status
not learned
measured difficulty
37% [default]
last interval [days]
repetition number in this series
0
memorised on
scheduled repetition
scheduled repetition interval
last repetition or drill
Details
No repetitions
Discussion
Do you want to join discussion? Click here to log in or create user.