Question

Assume that maize is a normal good. If the price of maize rises, then the substitution effect results in the person buying … of the good, and the income effect results in the person buying … of the good.

1. 

more, more

2. 

more, less

3. 

less, more

4. 

less, less

Answer 1

1. YES

more, more

2. NO

more, less

3. NO

less, more

4. NO

less, less