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Indifference curve analysis

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Indifference Curve Analysis - normal good, inferior good, giffen good

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Indifference curve analysis

  1. 1. Income and Substitution Effect of a fall in price of Good X (Normal)<br />Good XGood YI1I2ABBL1BL2XXBBL1CSITotal change in Good XXAXCBL3Substitution Effect (S):Income Effect (I):Total change in Good X (S + I)<br />Income and Substitution Effect of a fall in price of Good X (Inferior, non-Giffen)<br />Good XGood YI1I2ABBL1BL2XBBL1CSITotal change in Good XXAXCBL3Substitution Effect (S):Income Effect (I):Total change in Good X (S + I)<br />Income and Substitution Effect of a fall in price of Good X (Giffen)<br />Good XGood YI1I2ABBL1BL2XBBL1CSITotal change in Good XXAXCBL3Substitution Effect (S):Income Effect (I):Total change in Good X (S + I)<br />

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