Question: Let u(x, x) = x2x0.8. Suppose the consumer initially has income level m = 20 and the prices are p = 4 and P

Let u(x, x) = x2x0.8. Suppose the consumer initially has income level m = 20 and the prices are p = 4 and P = 1. Calculate the income and substitution effect when the price of Good 1 decreases to p = 2. Based on your calculation, was the substitution or income effect larger for Good 22

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