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I IUUICIII L' Ava has an income of $1,500 and she spends her income on two goods (1 and 2). Her utility function is u(x1,x2)

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I IUUICIII L' Ava has an income of $1,500 and she spends her income on two goods (1 and 2). Her utility function is u(x1,x2) = xx , where x1 is the amount of good 1 she consumes, and x2 is the amount of good 2 she consumes. The price of good 1 is $3 per unit, and the price of good 2 is $1 per unit. Suppose the price of good 1 rises to $4 per unit. (8.) Calculate the substitution effect and the income effect of the price change on Ava's consumption of good 1. (b) Is good 1 a normal good or an inferior good to Ava

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