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Substitution and Income Effects Paper
Managers are very interested in how a consumer makes choice among alternatives. In this exercise, we ask you to consider the price of gasoline you may purchase to operate your automobile in any month and any alternatives available to you assuming your net income available to make those purchases. Also assume gasoline prices for your auto rose 100% during one difficult summer as our time period for the purpose of discussion. Explain, then, the following effects in terms of the income effect, or the substitution effect, or both effects:
Construct a four-to-five page APA format paper based on the above issues. Use two external sources and demonstrate your understanding of the concepts by providing a graph of each effect as a figure in your paper.
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