Business, 22.11.2019 22:31 lilo1841

The total effect of a price change on the amount of a good that a consumer demands can be broken down into two parts: the income effect and the substitution effect. consider an increase in the price of the good and assume that the good in question is not a perfect substitute or a perfect complement relative to another good.
1st attempt see hint if the good is normal, then
(1) the substitution effect is the demand curve is ,
(2) the income effect is c , and
(3) the slope of if, however, the good is inferior (but not a giffen good), then
(4) the substitution effect is , ,and
(5) the income effect is finally, if the good is a giffen good then
(6) the slope of the demand curve is d , finally, if the good is a giffen good then
(7) the substitution effect is
(8) the income effect is , and
(9) the slope of the demand curve is

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