On the graph below, the consumer begins at L1. The relative prices change to L2. Complete the table and the sentence below. (Hint: The dashed line is a reference line to show us the income effect. Point B shows only the income effect. The change from A to B is the income effect. The change from B to C is the substitution effect.) A. Porcupines consumed at ‘A’ and ‘C’ B. Grenades consumed at ‘A’ and ‘C’ C. Will consumption of Grenades increase or decrease due to the income effect? What is quantity change in grenades due to the income effect?

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