1. Use a red pen for the initial budget constraint (before the price change), use a blue pen for the intermediate budget constraint (for determining the substitution effect), and use a black pen for the final budget constraint. Label the initial optimal bundle "A", the demand due to the substitution effect "B" and the final optimal bundle "C". Let good 2 be an inferior good. Graph the substitution and income effects of a rise in the price of good 2. a. Since the price is rising, what is the sign (positive or negative) of the change in demand due to the substitution effect? Indicate >0 or 0 or