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Decompose the total impact on the demanded

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Reference no: EM131277763

A consumer has monotonic and strictly convex preferences, but given her m and p2, good 1 is a Giffen good. Illustrate on the x1,x2 plane (figure) what happens to the demand for good 1 when its price increases. Decompose the total impact on the demanded (optimal) x1 into its substitution and income effects on your figure (clear figures please).

Reference no: EM131277763

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