To answer: The questions with the help of a diagram Concept Introduction: Substitution effect: The substitution effect is an economic theory in which when the price rises or income of the people falls people will substitute the dearer goods with less expensive alternative goods. Income effect: The income effect is described as the change in the quantity of goods and services due to a change in the income of the people. Normal good: The normal good which is a type of good in which people buy more of them when the income increases and buy less of them when income decreases.

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Chapter 10A, Problem 10P

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The questions with the help of a diagram

Concept Introduction:

Substitution effect: The substitution effect is an economic theory in which when the price rises or income of the people falls people will substitute the dearer goods with less expensive alternative goods.

Income effect: The income effect is described as the change in the quantity of goods and services due to a change in the income of the people.

Normal good: The normal good which is a type of good in which people buy more of them when the income increases and buy less of them when income decreases.

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