How do we graph these changes on the price quantity

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How do we graph these changes on the price-quantity space? A change in income keep- ing everything else constant generates a shift in the demand curve, in this case to the right: the consumer is willing to buy more for every price level. We can go further and trace this on a third system, the income-quantity system. We follow the convention from before, and have income on the y axis and quantity on the x axis. In this case, as income increases the amount of food demanded increases, so we have an upward-sloping curve. This is the Engel curve , a curve that relates changes in income to the quantity demanded, keeping everything else constant. A good can be both normal and inferior for different income ranges. Can you think of an example of good that can be both normal and inferior? 1
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Department of Economics University of California, Berkeley 2 Income and substitution effects of a price change Here we look at what a price change actually does to the consumer’s choice of a new optimal bundle. Because we are economists, we know that the absolute price of a good does not matter. What does matter is the price relative to the prices of other goods,
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