6. Assume both goods are normal goods. On a diagram similar to the one at right, show the location of the new consumption choice when there is a fall in the price of... a) good X, if the substitution effect dominates. b) good X, if the income effect dominates. c) good Y, if the substitution effect dominates. d) good Y, if the income effect dominates. X

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 5CQQ
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6. Assume both goods are normal goods. On a diagram similar to
the one at right, show the location of the new consumption
choice when there is a fall in the price of...
a) good X, if the substitution effect dominates.
good X, if the income effect dominates.
b)
c) good Y, if the substitution effect dominates.
d) good Y, if the income effect dominates.
X
Transcribed Image Text:6. Assume both goods are normal goods. On a diagram similar to the one at right, show the location of the new consumption choice when there is a fall in the price of... a) good X, if the substitution effect dominates. good X, if the income effect dominates. b) c) good Y, if the substitution effect dominates. d) good Y, if the income effect dominates. X
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