Globally food price has increased during the past year

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Globally food price has increased during the past year. It is in this context answer the following questions: (a) Explain why the law of demand applies to food just as it does to all other goods and services. (b) Explain how the substitution effect influences food purchases. Provide some examples of substitutions that people might make when the price of food rises and other things remain the same. (c) Explain how the income effect influences food purchases and provide some examples of the income effect that might occur when the price of food rises and other things remain the same. Word limit: About 500 words.

Reference no: EM131241211

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