Suppose that the price of good x falls, which causes the consumption of x to increase from 3 units of x to 4 units

Economics Dec 06, 2020

Suppose that the price of good x falls, which causes the consumption of x to increase from 3 units of x to 4 units. If the substitution effect of the price change was that consumption of good x increased by 3, then we know that the income effect caused consumption of good x to (insert: increase or decrease) by (insert a whole number with no decimals) . Good x is a (insert: normal, inferior or luxury) good.

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