Consider the situation where you are looking at the budget constraint for two goods, X and Y. These goods are the only two items that you spend your income on.

There is a decrease in the price of good X.

a-Describe how you would be able to tell the difference between Good X and Good Y being a NORMAL or INFERIOR good.

b-Can you show this graphically and provide general RANGES for outcomes that you describe in part a for both good X and good Y. Specifically when X is inferior, where both x&y are normal, and where Y is inferior.

c-provide the range where we would see a GIFFEN good.