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# Suppose that Jim's demand function for saltines is: QS = 8 + M/54PS Jim makes \$216 and the price of saltines is originally \$2 per box. Suppose PS...

5. Suppose that Jim’s demand function for saltines is:
QS = 8 + M/54PS

Jim makes \$216 and the price of saltines is originally \$2 per box. Suppose PS falls to \$1 per box.
a) Find the Total Effect, the Substitution Effect and the Income Effect due to the price change.
b) Are saltines a normal or an inferior good for Jim?
c) Draw the graph of the Slutsky decomposition for this problem.

Note: I also attached the Jpag version of the question so, if not clear then please check the attachment.

5. Suppose that Jim’s demand function for saltines is:
QS = 8 + M/54PS
Jim makes \$216 and the price of saltines is originally \$2 per box. Suppose PS falls to \$1 per box.
a) Find the Total Effect,...

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