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Please help with this problem. Income and substitution effects for 3 points. Consider a situation with a stan- dard budget line and standard monotonic preferences

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Income and substitution effects for 3 points. Consider a situation with a stan- dard budget line and standard monotonic preferences (i.e., downward-sloping and con- vex ICs). On the graph below, use the Slutsky decomposition to show the income effect (IE) and the substitution effect (SE) due to a decrease in the price of good 2 when good 1 is inferior. Clearly label your graph and indicate both SE and IE. 1

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