When the price of potatoes falls, and the consumer decreases the quantity of potatoes purchased, what can we infer about the income effect and substitution effect of the price change?

Question

Answer

The income effect is positive and exceeds the substitution effect.

Answer

The income effect is positive and reinforces the substitution effect.

Answer

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

Answer

The income effect is negative and exceeds the substitution effect.

Answer

The income effect is negative and reinforces the substitution effect.

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When the price of potatoes falls, and the consumer decreases the quantity of pot...

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