Question
A consumer gets utility from two goods, x1 and x1. The consumer has wellbehaved preferences which are consistent with diminishing MRS. Both x1 and x2
A consumer gets utility from two goods, x1 and x1. The consumer has wellbehaved preferences which are consistent with diminishing MRS. Both x1 and x2 are NORMAL goods and GROSS COMPLEMENTS for the consumer. Using budget lines and indifference curves, ILLUSTRATE and EXPLAIN the income and substitution effects of a DECREASE in the price of x2.
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
