Income and substitution effects

Reference no: EM1368668

After Iraq invaded Kuwait, gasoline prices rose dramatically--up to 50%. There were many effectrs 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: EM1368668

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