Economics Multiple Choice Question – 16 January 2018

When the price of a normal good falls, ceteris paribus, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased.
Select ONE answer:

1. A decrease, a decrease
2. An increase, an increase
3. An increase, a decrease
4. A decrease, an increase

What is meant by “relative price”?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2

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