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Unformatted text preview: Income effect Substitution effect E 1 E’ E 2 X Y Original budget line Hypothetical budget line New budget line Income and Substitution Effects: Px decreases (Inferior Good) Income effect Substitution effect X Y E 1 E’ E 2...
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This note was uploaded on 02/01/2008 for the course ECON 101 taught by Professor Hansen during the Spring '07 term at University of Wisconsin.
- Spring '07