'Income influence' presentation slideshows

Income and Substitution Effects

Income and Substitution Effects. Engel Curves and the Slutsky Equation. Demand and income. X. If your income is initially X 1, you buy A 1 apples When your income rises to X 2 , you buy A 2 apples. To make the obvious point, demand is a function of income. X 2. X 1. I 2. I 1. A 2.

647 views • 47 slides