Suppose P_B falls, resulting in the following information: P_A = $10, Q_A = 2.5, P_B = $5, Q_B = 15. Assume that Janine is maximising utility under both price conditions mentioned earlier. Also, note that if after the price reduction, Janine's income is adjusted to make it just as affordable. After adjusting income as a result of the price fall (i.e., P_B), the quantity for good A is 1.5 (or Q_A =1.5) and the quantity for good B is 9 (or Q_B = 9).

A. Determine the change in consumption rate of good B due to (1) the substitution effect and (2) the income effect. Decompose the two effects using the Slutsky decomposition method (i.e., explain how the pivot-shift operation can decompose the two effects). In a graph, along the vertical axis, label the income effect, substitution effect, and the total effect. Use the horizontal axis to represent good A and the vertical axis to represent good B. (10 pts.)

B. Determine if product B is a normal, inferior, or Giffen good. Explain your answer. (3pts.)