The price of potatoes falls, and the quantity of potatoes purchased decreases. What can we infer?

Question

Accepted Answer

The income effect is negative and exceeds the substitution effect.

Answer

The income effect is negative and reinforces the substitution effect.

Answer

The income effect is negative and just about offsets the substitution effect.

Answer

The income effect is positive and exceeds the substitution effect.

Answer

The income effect is positive and reinforces the substitution effect.

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