ECON MICRO (with ECON MICRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
5th Edition
ISBN: 9781305631946
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 12, Problem 1.2P
To determine
Enlighten whether the effects are income or substitution when the cost of living increases and when there is a reduction in the
Concept Introduction:
Income effect:
This is described as the change in the quantity of goods and services due to a change in the income of the people.
Substitution effect:
This 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.
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ECON MICRO (with ECON MICRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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