Rather Volatile
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- Jan 11, 2011
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Consider the optimal choice of a consumer between two goods, A and B, given prices of the goods, the consumer’s budget and preferences. Suppose the price for good A doubles. Show graphically and explain verbally the ‘substitution effect’ of this change in prices. Now suppose the price for good B doubles as well. Show graphically and explain verbally the ‘income effect’ of this change in prices. (60 marks)
Obviously I don't want you to do the question for me, just give me some tips and point me in the right direction because at the moment I am utterly clueless.
5 stars and stuff to best answer, thanks in advance ^^
No answers? Are you all stumped
Obviously I don't want you to do the question for me, just give me some tips and point me in the right direction because at the moment I am utterly clueless.
5 stars and stuff to best answer, thanks in advance ^^
No answers? Are you all stumped