the income effect Flashcards
1
Q
what is the income effect used to explain?
A
the inverse proportionality of the demand curve.(income effect= income constant)
2
Q
what is the income effect
A
inc.eff. suggest that if the income of a person remains constant and the price of a good reduces (ceteris paribus) the person will be able to buy more of the good which increases consumer demand and vise versa
3
Q
A
