Show the substitution and income effects of price decrease


Good X is a normal good. Use indifference curves and budget lines to show the substitution and income effects of a price decrease for Good X. Put "expenditures on other goods" on the Y-axis, and clearly label all lines and curves. Make sure your diagram clearly shows the income effect and the substitution effect. Do the same thing for a typical inferior good and a Giffen good.

Give a short one or two sentence explanation of what the substitution effect means. Do the same for the income effect.

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Microeconomics: Show the substitution and income effects of price decrease
Reference No:- TGS0514055

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