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ECON 2210 (30)
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Lecture

Income Change.docx

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Department
Economics
Course
ECON 2210
Professor
M.Yu
Semester
Fall

Description
Income Change Change in income: - We assume individual’s income is held constant according to demand curve - Normal goods: when income increase the demand for normal goods increases Ex. Clothing, more income means you buy more clothing - Inferior goods: when income increases the demand for inferior goods decreases Ex. Canvas shoes, income goes up and you buy fewer canvas shoes but more leather shoes (normal good) Change in other prices: - When price of good 2 changes, it changes relative price p1/p2 - It will cause good 2 to become cheaper and relative price of good 1 increases - People will substitute out good 1 and int
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