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Pose a problem to the class, have them break up into two or three groups and work the problem through using Figure 4.2 found on page 75.
Substitution Effect
The change in consumption patterns due to a change in relative prices, causing consumers to replace pricier items with more affordable substitutes.
Substitution Effect
The change in consumption patterns due to a change in relative prices, causing consumers to substitute away from more expensive items to cheaper alternatives.
Income Effect
The modification of income for someone or within an economy, and its subsequent impact on how much of a good or service is sought after.
Engel Curve
A graph showing the relationship between a consumer's income and their expenditure on a specific good.
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