Derive graphically the substitution and income effects of a price increase in an EOG - X coordinate system if X is a normal; inferior but not Giffen; Giffen good. Do the same for a price decrease. Using an X - Y coordinate system, derive the substitution and income effects graphically when X and Y are perfect complements and the price of good X decreases. Do not forget to label the axes, the budget lines, the total, the substitution, and the income effects in your graph.

Derive graphically the substitution and income effects of a price increase in an EOG - X coordinate system if X is a normal; inferior but not Giffen; Giffen good. Do the same for a price decrease. Using an X - Y coordinate system, derive the substitution and income effects graphically when X and Y are perfect complements and the price of good X decreases. Do not forget to label the axes, the budget lines, the total, the substitution, and the income effects in your graph.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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