Consider a budget constraint model with two goods X and Y. Suppose X is an inferior good, and the price of Y decreases. The substitution effect says we’ll demand _____ of good X, while the income effect says we’ll demand ______ of good X.

Consider a budget constraint model with two goods X and Y. Suppose X is an inferior good, and the price of Y decreases. The substitution effect says we’ll demand _ of good X, while the income effect says we’ll demand __ of good X.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 15SQ

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