This document contains diagrams illustrating the income and substitution effects of a fall in the price of good X under three scenarios: normal goods, inferior goods, and Giffen goods. For normal goods, consumption of good X increases due to both the substitution and income effect. For inferior goods, consumption decreases due to the substitution effect but increases due to the income effect, resulting in an ambiguous total change. For Giffen goods, consumption paradoxically increases due to the income effect outweighing the substitution effect.

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 />