The following figure shows a portion of a consumer's indifference map and budget lines. The price of good Y is $7 and the consumer's income is $700.
Let the consumer begin in utility maximizing equilibrium at point A on indifference curve I. Next the price of good X changes so that the consumer moves to a new utility maximizing equilibrium at point B on indifference curve II.
-The substitution effect of the change in the price of X is ______; the income effect is ______; the total effect is ______.

Question

The following figure shows a portion of a consumer's indifference map and budget lines. The price of good Y is $7 and the consumer's income is $700.
  Let the consumer begin in utility maximizing equilibrium at point A on indifference curve I. Next the price of good X changes so that the consumer moves to a new utility maximizing equilibrium at point B on indifference curve II.
-The substitution effect of the change in the price of X is ______; the income effect is ______; the total effect is ______.

Quizplus · Accepted Answer

The Answer of The following figure shows a portion of a consumer's indifference map and budget lines. The price of good Y is $7 and the consumer's income is $700.
  Let the consumer begin in utility maximizing equilibrium at point A on indifference curve I. Next the price of good X changes so that the consumer moves to a new utility maximizing equilibrium at point B on indifference curve II.
-The substitution effect of the change in the price of X is ______; the income effect is ______; the total effect is ______.

The Following Figure Shows a Portion of a Consumer's Indifference