3 If the price of an apple rises to 1.00 and the price of songs does not...

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3 If the price of an apple rises to £1.00 and the price of songs does not change, what is the price effect?

What is the substitution effect and the income effect of the price change?

Amy has a fixed budget for buying songs and apples. The figure shows Amy’s budget line and an indifference map between song downloads and apples.

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Economics

ISBN: 9781118150122

10th European Edition

Authors: Michael Parkin, Dr Melanie Powell, Prof Kent Matthews

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Question Posted: Nov 06, 2024 04:00 AM

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3 If the price of an apple rises to 1.00 and the price of songs does not change, what is the price effect? What is the substitution effect and the income effect of the price change? Amy has a fixed...
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3 If the price of an apple rises to 1.00 and the price of songs does not...

Question:

Songs (per week) 19 10 7 6 5 4 3 T 8 2 1 0 1 2 3 4 A 50 2 6 7 8 910 Apples (per week)

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Economics

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