Income and Substitution Effects

One price change, two forces

Seeing the split

Giffen goods, the theoretical extreme

Why the decomposition earns its keep

The price of movie tickets falls while income is unchanged. Which statement correctly describes the substitution and income effects on movie attendance for a typical consumer?

Instant noodles are an inferior good that occupies a small budget share. When the price of noodles falls, what happens to noodle consumption?

A household receives a 60 dollar food voucher, and studies show that for every dollar of such aid, food spending rises by 30 cents, with the rest going to other goods. Compute the rise in food spending in dollars and write the number.

The price of a normal good falls while money income is unchanged. What do the substitution and income effects do to its quantity demanded?

Which combination of properties would make a good a candidate for Giffen behavior, demand rising as its own price rises?

A household receives a 60 dollar food voucher and raises food spending by 30 dollars beyond its usual budget. Compute the marginal propensity to consume food out of the voucher, and write the number.