Microeconomics question about income and substitution effects? Watch

Rrobba
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John and Jane are university students. Jane is a vegetarian and John likes meat. Although, John considers meat to be an inferior good. If the price of meat falls illustrate and explain, with reference to indifference curves, the income and substitution effects that may arise for both John and Jane.

I've switched to this course just now so have't yet grasped the concepts. Any ideas?
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Rrobba
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TheLastFrench
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The substitution effect : Meat becomes less expensive relatively than other goods.
The income Effet : For the same allocation, people need less money to buy it after the price falling of meat. They can buy more of ALL goods.


Search about Slutsky's formula for more informations. And look at SLutsky And Hicks explanations for the curve.


Please sorry my bad english.
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