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Business Data Management · Quiz 1 · 16 Oct 2022 · September 2022 term

Question 5: Assume person X consumes only 2 goods food and books in a…

Question 5

+1 markOne correct option

Assume person X consumes only 2 goods food and books in a month. Also assume that both food and books are normal goods for X. A decrease in the price of food will lead to X’s consumption of books to:

  1. A

    increase owing to substitution effect.

  2. B

    increase owing to negative income elasticity.

  3. C

    increase owing to income effect.

  4. D

    remain unchanged

Show answer

Correct answer

  • C

    increase owing to income effect.

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Question 5 of 13 in the IIT Madras BS Business Data Management (BDM) Quiz 1 paper sat on 16 Oct 2022, in the September 2022 term (IIT M QUIZ 1 FOUNDATION DAD DIPLOMA QPD2 16 Oct 2022). It carries 1 mark.

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