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In the case of perfect substitutes, xandy, provide two cases where: (i) the income effect is zero and (ii) the income effect is non-zero;
In the case of perfect substitutes, xandy, provide two cases where: (i) the income effect is zero and (ii) the income effect is non-zero; of a price increase of good x. Note, the price increase does not have to be the same across the two cases. Use a Hicksian compensation and state clearly any assumptions made.
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
4th edition
978-0133428469, 013342846X, 133428370, 978-0133428377
