If the price of a normal good rises, the income effect will result in households buying ________ of the good and the substitution effect will result in households buying ________ of the good.

A) more; more
B) more; less
C) less; more
D) less; less

Income Effect

The change in an individual's consumption resulting from a change in their real income, affecting their purchasing power.

Normal Good

A type of good for which demand increases as the income of individuals or the economy grows.

Substitution Effect

The substitution effect occurs when consumers replace more expensive items with less costly alternatives.