Does income effect cause her to buy more or less clothing

Reference no: EM131324464

Michelle spends all her money on food and clothing. When the price of clothing decreases, she buys more clothing.

a. Does the substitution effect cause her to buy more or less clothing? Explain. (If the direction of the effect is ambiguous, say so.)

b. Does the income effect cause her to buy more or less clothing? Explain. (If the direction of the effect is ambiguous, say so.)

Reference no: EM131324464

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