67 235
Assignments Done
99,2%
Successfully Done
In November 2018

Answer to Question #48879 in Macroeconomics for ojo oluwaseyi

Question #48879
HOW DOES ECONOMIC CONSUMER REACT TO CHANGES IN BOTH PRICE & INCOME OF A NORMAL & SUPERIOR GOODS IN THE LIKES OF SUBSTITUTABILITY OF BOTH EXPORTED & IMPORTED GOODS USING GAME THEORY
Expert's answer
After the changes in both price of a normal good and income the consumer will buy the same amount of this good either both price and income increased or they decreased, because the proportion of his consumption will not change. 
But after the changes in both price of a superior good and income the consumer will buy more of this good, if the price and income increased and less of this good, if the price and income decreased, as for superior goods there is both income and substitution effects.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions