Exhibit 5A-2 -Refer to Exhibit 5A-2. If the Individual Starts at Point

Multiple Choice

Exhibit 5A-2
-Refer to Exhibit 5A-2. If the individual starts at point A and moves to point B as a result of an increase in the price of Y, then the amount of reduction in the consumption of Y is

A) 45 due to the substitution effect and 25 due to the income effect.
B) 25 due to the substitution effect and 20 due to the income effect.
C) 25 due to both the substitution effect and income effect.
D) 20 due to the substitution effect and 25 due to the income effect.
E) 25 due to the substitution effect and 45 due to the income effect.