Income effect income the change in consumption that

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: s (offsets substitution effect to some degree). Pop (six-packs per month) Substitution Effect and Income Effect When the price of When movies falls from $6 to $3... $3... 10 8 7 c 6 5 5 4 Substitution 3 effect 2 j ... Lisa’s best affordable ... point changes from c Income to j. effect to k I2 I1 0 2 45 6 8 10 10 Movies (per month)...
View Full Document

This document was uploaded on 03/14/2014.

Ask a homework question - tutors are online