Explain the income effect and the substitution effects of a price ...

[plus1]

Explain the income effect and the substitution effects of a price change for a normal good.
 
  What will be an ideal response?

Question 2

The way in which a corporation is structured and the impact a corporation's structure has on the firm's behavior is referred to as
 
  A) structural behavior. B) corporate governance.
  C) structure composition theory. D) corporate taxation.

[spencer.martell]

Answer to Question 1

For normal goods, the income and substitution effects work in the same direction. Higher prices lead to a lower quantity demanded, and lower prices lead to a higher quantity demanded.

Answer to Question 2

B