Suppose that the price of cola rises to $3.00 a can and the price of popcorn and

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Suppose that the price of cola rises to $3.00 a can and the price of popcorn and Sara’s income remain the same.

a. What is the substitution effect of this price change and what is the income effect of the price change?

b. Is cola a normal good or an inferior good?

Explain.

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Economics

ISBN: 125380

10th Edition

Authors: Michael Parkin ,Robin Bade

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Question Posted: Nov 05, 2024 08:00 AM

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Suppose that the price of cola rises to $3.00 a can and the price of popcorn and

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