hi regarding question one. it says states a substitution effect and an income effect from the text. can you please give me one of each and for the substitution effect can we say that the rivals firms of Mcdonald's substitute spending today with saving rather than McDonald choosing to spend rather than to save?

BUSINESS Having a Happy Meal at Mcdonald's CASE n 2013, Mcdonald's agreed to stop featuring and promoting soda as a bever age option for its Happy Meals. It was the latest step in Mcdonald's efforts to make its standard child's Happy Meal more healthful. For example, in 2011 Mcdonald's changed its standard Happy Meal to include a quarter cup of apple slices and fewer french fries, and removed its caramel sauce, thereby lowering the salt, sugar, fat, and calorie content. To be sure, healthier options had always been available: a parent could ask for fruit or milk instead of fries or soda. But most people opted for the standard meal by defoul According to restaurant analyst Peter Saleh, "This is good pub. licity, and if you sell more Happy Meals, you're selling more Big Macs to the parents." The changes are meant to help offset long-standing criticism of the company for the lack of nutritional balance in its menu and address concerns over the growing epidemic of childhood obesity Critics contend that at around 600 calories, Happy Meals are still 1& YUMMY too calorie rich for small children. Long-time observers say that more than just countering its critics, Mcdonald's is trying to hold bunge. onto a loyal customer base: Happy Meals accounted for an esti- mated 10% of its annual sales, or close to $9 billion in 2013. And HAMBURGER although its rivals, such as Burger King and Wendy's, followed Mcdonald's lead by offering healthier kids' meals, Mcdonald's APPLES consistently sells more kids' meals than the competition. Mcdonald's has, in fact, been amazingly successful at keeping its customers happy even in a tough environment. In 2009, at the lowest point of the recession that began in 2007, sales at full-service Michael Neelon/Alamy restaurants fell more than 6% but stayed about the same at fast-food outlets. These restaurants kept their sales up by offering discounts and promotions as well as $1 menus and cheap combination meals. Same-store sales at Mcdonald's have stayed approximately level during the downturn. However, many fast-food chains, such as Burger King, Jack in the Box, and Carl Jr.'s, saw their sales fall during the recession years. They cut back their advertising spending as the much larger Mcdonald's increased its spending and its market share. Mcdonald's has also aggressively expanded its menus-from the healthier Happy Meals to the "McCafe" line of espresso drinks, smoothies, and exotically flavored wraps. Observers are divided as to whether Mcdonald's is earnestly attempting h get its customers to eat healthier food or is just engaging in advertising spin. One unknown is how customers will react: as one commenter said, "Salt may be bad for you, but it tastes great. . . . You can't demand that Mcdonald's or Burger King stop selling hamburgers and fries." In the same vein, one franchise owner noted "Expect customers to try the apples and then revert to asking for fries." QUESTIONS FOR THOUGHT 1. Give an example of a normal good and an inferior good mentioned in this case. Cite examples of substitution effects and income effects from the case 2. To induce fast-food customers to eat more healthful meals, what alternatives are there to bans? Do you think these alternatives would work? Why or why not