Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel, she spends $50 on sushi and $50 on bagels.
Instructions: Enter your answers as whole numbers.
a. How many pieces of sushi and how many bagels did Deborah consume before the price change?
Pieces of sushi = .
Bagels = .
b. At the new prices, how much money would it have cost Deborah to buy those same quantities (the ones that she consumed before the price change)?
c. Given that it used to take Deborah's entire $200 to buy those quantities, how big is the income effect caused by the reduction in the price of bagels?