Microeconomic Theory KEY Exam Questions and CORRECT Answers
Income Consumption Curve (ICC)set of utility maximizing consumption bundles as income varies Income is increasing on Y, upward sloping Engel Curvethe amount of a good a consumer purchases as INCOME varies from icc Giffen goodPositive sloping demand curve Negative income effect absolute value of income effectsubstitution effect WARPif the y bundle is affordable when X is purchased, when y is purchased, x must no longer be affordable Equation for Budget LineI=PxQx+PyQy
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