Question: Suppose an individual's utility function is U(x, y) = Vx +2 . Vy , and her total budget is $90. The price of y is

Suppose an individual's utility function is U(x, y) = Vx +2 . Vy , and her total budget is $90. The price of y is always $1, but the price of x drops from $1 to 50 cents. Calculate the substitution effect on x and the income effect on y. a. SE= +32 X; IE=+10 Y b. SE=+32 X; IE= - 22 Y c. SE= +18 X; IE= - 22 Y d. SE= +18 X; IE=+10 Y

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