Economist George Stigler once wrote that, according to consumer theory, “if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises.” What kind of commodity was Stigler referring to? An inferior good   A normal good     When the price of this commodity rises, the substitution effect is    and the income effect is    . So the net result for consumption of this commodity    .

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A: Answer- (A)   That is both increases

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A: Hi student, as per the guideline, we are providing answer for the first question. Kindly post the…

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Q: when is the substitution effect greater than the income effect?

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Q: ll there

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