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Can you please check whether this is correct. Both diagrams to the right show the income and substitution effects of a rise in price from

Can you please check whether this is correct.

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Both diagrams to the right show the income and substitution effects of a rise in price from po to p, . In each Q case the substitution effect is illustrated by the change in quantity demanded from On to Q*; the income Good X effect is illustrated by the change in quantity demanded from Q * to Q,- a. Is Good X a normal or an inferior good? Explain. P1 Good X is an inferior good because the income effect is illustrated by a decrease in quantity Price demanded as real income increases when the price rises from pp to P1 . b, Is Good Y a normal or an inferior good? Explain. Q1 On Quantity Good Y is a normal good because the income effect is illustrated by a decrease in quantity demanded as real income decreases | when the price rises from pp to P1 . Good Y c. For each of Goods X and Y, explain whether the income effect is working in the same direction or the opposite direction as the substitution effect. P1 For Good X, the income effect is working in the same direction as the substitution effect because the Price change in quantity demanded from Q * to Q, is in the opposite direction as the change in quantity demanded from Op to Q* . For Good Y, the income effect is working in the same direction as the substitution effect because the change in quantity demanded from Q * to Q, is in the opposite direction Q1 an Quantity as the change in quantity demanded from Of to Q*

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