Suppose ham is

a normal

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good. How will consumers adjust their buying decisions if the price of ham$$ changes?$$

Part $2$

If the price of ham$$ increases, then consumers will demand

Part $3$

A$.$

lessless

ham due to the income effect because their purchasing power decreases and less ham due to the substitution effect because the opportunity cost of consuming ham is higher.

B$.$

more ham due to the income effect because the opportunity cost of consuming ham is lower and less ham due to the substitution effect because their purchasing power decreases.

C$.$

lessless

ham due to the income effect because the opportunity cost of consuming ham is higher and less ham due to the substitution effect because their purchasing power decreases.

D$.$

more ham due to the income effect because their purchasing power increases and less ham due to the substitution effect because the opportunity cost of consuming ham is higher.

E$.$

moremore

ham due to the income effect because their purchasing power decreases and less ham due to the substitution effect because the opportunity cost of consuming ham is higher.

Part $4$

$$Instead$,$ suppose ham is

an inferioran$$inferior

good.

Part $5$

If the price of ham$$ increases, then consumers will demand

$$

$$

moremore

lessless

the same amount ofthe$$same$$amount$$of

ham due to the income effect and

$$

$$

less

more

the same amount of

ham due to the substitution effect.