Does this change create a substitution or real income effect

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Question: You and your friends are considering vacationing in either Cabo San Lucas or Cancun for spring break. When you first researched the cost of your hotel and flights, the total price was $1,000 to each destination. However, a sale has lowered the total cost of going to Cancun to $800. Does this change create a substitution effect, a real-income effect, or both? Explain.

Reference no: EM131481257

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