Problem
Proving Substitution Effect & Income Effect.
Given your existing income, you spend all of your income for 2 goods, i.e. petrol (gasoline) for car and the remaining balance on other goods."
i. What happen to your Substitution Effect and Income?
ii. Effect when government impose RM0.50 on your daily usage of petrol (gasoline)?
iii. Show the impact of tax by using relevant graph.