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Explain What Would Happen to the Equilibrium Consumption of Two

question 43

Essay

Explain what would happen to the equilibrium consumption of two goods,X and Y,if (a)income doubled and all prices tripled,(b)all prices doubled and income tripled,and (c)all prices and income doubled.In each case,show the effects when both goods are normal goods and when one good is a normal good and the other an inferior good.


Definitions:

Serotonin

A neurotransmitter in the brain that affects mood, social behavior, appetite, digestion, sleep, memory, and sexual desire and function.

Dopamine

A neurotransmitter involved in controlling movement and posture, moderating mood, and affecting motivation and reward.

Impulsivity

A tendency to act on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.

Novelty Seeking

The trait of pursuing new and different experiences, sensations, and objects, often driven by a desire for excitement and exploration.

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