Question
Suppose the demand curve for movie tickets is downward sloping and the income elasticity of demand...
Suppose the demand curve for movie tickets is downward sloping and the income elasticity of demand for economics textbooks is positive. a. Draw a utility-maximization model showing the substitution and income effects created when the price of movie tickets rises. (Set up your model with movie tickets on the horizontal axis and all other goods on the vertical axis.) b. Explain how you can tell from your model that the income elasticity of deman d for movie tickets is positive.
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