Julian buys plants and flowers every month. Both are normal goods. When the price of flowers fell, income effect predicts that he will of flowers and plants. Substitution effect more less predicts he will of plants. It turned out that Julian purchased fewer plants when the price of flowers fell. For him, substitution effect was stronger than the other.
Julian buys plants and flowers every month. Both are normal goods. When the price of flowers fell, income effect predicts that he will of flowers and plants. Substitution effect more less predicts he will of plants. It turned out that Julian purchased fewer plants when the price of flowers fell. For him, substitution effect was stronger than the other.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Economic

Transcribed Image Text:Julian buys plants and flowers every month. Both are normal goods. When the
price of flowers fell, income effect predicts that he will
of flowers and plants. Substitution effect
more
predicts he will less
of plants. It turned out
that Julian purchased fewer plants when the price of flowers fell. For him,
substitution
effect was stronger than the other.
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