For normal goods like cola and pizza, what happens due to the income effect when the price of pizza falls?

Question

Answer

None of the above.

Answer

There is movement along the indifference curve, so the consumer buys less cola.

Answer

There is a shift to a lower indifference curve, so the consumer buys more cola.

Answer

There is movement along the indifference curve, so the consumer buys more cola.

Answer

There is a shift to a higher indifference curve, so the consumer buys more cola.

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