For the Following Scenarios, Explain the Direction of the Substitution

question 23

Essay

For the following scenarios, explain the direction of the substitution effect, income effect, and total effect.
I. The price of good X, a normal good, increases.
II. The price of good X, an inferior good, decreases.
III. The price of good X, a Giffen good, increases.

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Definitions:

Attributions

The process by which individuals explain the causes of behavior and events, often as either internal dispositions or external situations.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or societal standards.

Compliance

Changing one’s behavior as a result of other people directing or asking for the change.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or standards.