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5. A. Describe and explain the income effect for an inferior good. Give one example 8. Describe and explain the substitution effect for an inferior

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5. A. Describe and explain the income effect for an inferior good. Give one example 8. Describe and explain the substitution effect for an inferior good. Use the same good from your example in part A. Make good X both interior and Giffen. Make good Y normal. Create a budget line for both the income effect and substitution effect from parts A and B. Draw a second budget line where the price of the inferior good X decreases, but both the price of the normal good (the other available good, and the total Income in dollars remains the same. Also include the audiary budget line and the three appropriate indifference curves that show the substitution effect. the income effect and the total effect. Make sure that the directions of new consumption choice follow the correct directions for a normal good with a price Secreate Draw arrows between changes in this consumer's choice to avoid any confusion. Make the graph big enough to avoid any confusion, as well (note: You must make the correct income effect for the inferior good) 5. A. Describe and explain the income effect for an Interior good. Give one example B. Describe and explain the substitution effect for an inferior good. Use the same good from your example in part A. Make good X both interior and Giffen. Make good Y normal. Create a budget line for both the income effect and substitution effect from parts A and B. Draw a second budget line where the price of the inferior good X decreases, but both the price of the normal good Y(the other available good), and the total Income in dollars remains the same. Also include the auxiliary budget line and the three appropriate indifference curves that show the substitution effect. the income effect and the total effect. Make sure that the directions of new consumption choice follow the correct directions for a normal good with a price decrease. Draw arrows between changes in this consumer's choice, to avoid any confusion. Make the graph big enough to svold any confusion, as well. (note: You must make the correct income effect for the Inferior good)

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