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(8pts) Suppose that Sam has a utility mction u(x, y): x+1g where x is the amount of good 1 and y is the amount of
(8pts) Suppose that Sam has a utility mction u(x, y): x+1g where x is the amount of good 1 and y is the amount of good 2. The price of good 2 is $20, and the income is $ 90. With the $20 price decrease of good 1 from $30 to $10, then what is the substitution effect and income effect on the demand for good 1? With the $5 price decrease of good 1 from $10 to $5, then what is the substitution effect and income effect on the demand for good 1
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