Jennifer spends her weekly allowance of $100 on goods X and Y. Currently Px = $10 and Py = $5 and she buys 5X and 10Y. The price of Y then doubles and Jennifer now buys equal amounts of X and Y.
(a) With good Y on the Y-axis, illustrate the income and substitution effects of this increase in the price of Y.
(b) What kind of good is Y?
(c) What is the price elasticity of demand for good X with respect to Py.