[Solution]Suppose a consumer faces a rise in the price of product A while

Suppose a consumer faces a rise in the price of product A while the consumer’s income remains unchanged. Which of the following statements about the…

Suppose a consumer faces a rise in the price of product A while the consumer’s income remains unchanged. Which of the following statements about the income effect isfalse?a)There is no income effect because the consumer’s income is unchanged.b)Between them the income and substitution effects cover the entire change in the quantity that the consumer demands.c)If the product is normal, the income effect works in the same direction as the substitution effect.d) If the product is inferior, the income effect works in the opposite direction to the substitution effect.

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