Question

After Iraq invaded Kuwait, gasoline prices rose dramatically-up to 50 percent. There were many effects of the increased price of gasoline> Explain the following effects in terms of income effect, or the substitution effect, or both effects: a. People drove less and purchased less gas. b. People ate out less often. c. People had more tune-ups done on their cars. d. Bike sales went up. e. The sale of lottery tickets fell. f. People took vacations closer to home.

Answer 1

DAMON is Working on it for you so stop posting it!

Answer 2

Sorry, I thought I posted it undr the incorrect subject.

Thank you

Answer 3

I just finished the one maximizing utility of wine and cheese. I am way behind on the physics.

Answer 4

Jean - you can figure this one out just as easily as I can.
not eating out for example is clearly income decrease effect as is lottery budgets
bike purchases is mostly substitution

Answer 5

Thank you Damon for all your help this evening.