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A price change would have the largest income effect on a A) magazine. B) tablet computer. C) piece of clothing.

User Rae
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1 Answer

8 votes

Answer: D. Car

Step-by-step explanation:

The full options for this question includes a fourth option which is option D for Car.

Should this be the case then a car would present the largest income effect if there was a price change.

Goods that are more expensive will present larger income effects because a price change would affect their prices more and make them even more expensive which means that they would be taking more from income and in so doing causing a larger income effect.

(if there is no fourth option for car, use tablet computer instead).

User Tumchaaditya
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