3.1 Jonas is a German native who has lived for the past 4 years in the UK pursuing his undergraduate study in Economics. For each of the last 4 years, he has made trips back to Germany for Christmas, Easter and the summer.

During 2015, the price of a round-trip train ticket from London to Frankfurt decreased from €159 to €109. As a result, Jonas decided to purchase tickets to watch Les Misérables at the Queen’s Theatre of London.

a. Explain how Jonas’ demand for musical tickets can be affected by a decrease in rail travel prices.

b. By using this example, explain why both income and substitution effect might be expected to increase Jonas’

number of trips to Frankfurt.