Economics 9708 · AS & A Level · Indifference curves and budget lines

Indifference curves and budget lines — practice question

Broken rice is an inferior good. If its price falls, what income effect and substitution effect will result on the quantity demanded of broken rice?

  • Aquantity demanded due to income effect: falls; quantity demanded due to substitution effect: falls
  • Bquantity demanded due to income effect: falls; quantity demanded due to substitution effect: rises
  • Cquantity demanded due to income effect: rises; quantity demanded due to substitution effect: falls
  • Dquantity demanded due to income effect: rises; quantity demanded due to substitution effect: rises

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