Effects in terms of the income effect-substitution effect

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After Iraq invaded Kuwait, gasoline prices rose dramatically – up 50 percent. There were many effects of the increased price of gasoline. Explain the following effects in terms of the income effect, substitution effect, or both effects:

a. People drove less and purchased less gas.

b. People ate out less often.

c. People had more tune-ups done on their cars.

d. Bike sales went up.

e. The sale of lottery tickets fell.

f. People took vacations closer to home.

Reference no: EM13832716

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