Question

5. If UWO students suffer a drop in income, what will happen to the market for UWO t-shirts (assuming they’re a normal good)?

a. The price will rise, the quantity will fall
b. The price will rise, the quantity will rise
c. The price will fall, the quantity will rise
d. The price will fall, the quantity will fall

Answer 1

If the income decreases, the demand also decreases, which causes also price and quantity demanded to decrease.
So, the right answer is d. The price will fall, the quantity will fall.