Economics Question

Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter5: Consumer Choice: Individual And Market Demand
Section: Chapter Questions
Problem 3DQ
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1. Assume well behaved preferences for a consumer. If total income goes up, ceteris paribus what would be the impact on the Budget line?

2. Assume well behaved preferences for a consumer. If total price of good on Y axis goes up, ceteris paribus what would be the impact on the Budget line?

3. Differentiate between the concept of Income effect and Substitution effect in Price Decomposition

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