Unformatted text preview: point as C . Also draw the new indifference curve that passes through C . See the red line. (c) Break up the price effect into substitution and income effects graphically. See the graph. (d) How much more x does Ysidro buy as a result of his substitution effect? 5 units (the movement from A to B ). (e) How much more or less of x does Ysidro buy as a result of his income effect? 4 units more (the movement from B to C ). 25 20 15 10 20 30 25 15 10 5 x y A C B...
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- Summer '07
- Microeconomics, typical indifference curve, Shomu Banerjee ECON, Ysidro