Income and Substitution Homework Help

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Most students consider Income and substitution as one of the toughest and most dreaded subjects. It is because of the complex concepts, the abundance of formulas, and the highly complicated problems that are extremely difficult to grasp and solve. Furthermore, the additional burden of assignments and homework make the students feel more worried and stressed out. In such a situation, what they need the most is the assistance of the expert faculty of income and substitution homework help.

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A brief introduction to Income and Substitution

The subject experts of income and substitution homework help explain to you the effect of income and substitution on the commodity, by presenting you with an example. When the price of commodity increases, the decision of the purchaser gets affected. If the income is stagnant, but the prices are increasing, you will buy less commodities.

On the other hand, if the income is stagnant and the prices are decreasing, you will go for more purchase of goods and services. This is known as the income effect.

Let us know focus on substitution effect. It is a condition when the relative prices of two commodities are compared. If the price of a commodity A has increased and the price of a commodity B remains the same, people will be more inclined to buy commodity B. Substitution effect is defined as the tendency of the purchaser to change his/her decision of purchasing by considering the relative price of a commodity.

Generally, substitution effect has a stronger impact on the consumer as compared to that of the income effect. Learn about the basics of Income and Substitution and the concepts related to it, from the experts of income and substitution homework help. 

Categories of goods

On the basis of income and substitution, goods are classified into two categories:

  • Normal goods:

When the income remains constant, the goods bought are termed as normal goods.

  • Inferior goods:

When the income of a person decreases, the goods bought are termed as inferior goods. When one becomes wealthy, one gets the luxury of buying a commodity of good quality. This preference is reflected in the slope of the indifference curves.

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