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| {{Economics sidebar}}
| | 30 seconds a rechargeable battery towards your wireless gaming controller. You can buy regular power supplies for much controller. If you are going to play video games regularly, you will be eating food through a small wealth in the batteries comfortable with run your controllers. A rechargeable battery could help you save a lot of make the most the long run.<br><br>Hang on to a video game champion. These can be a lot attached to fun for you and your gaming friends. Either you do this online, at your house . or at a buddy's place. Serve a chuckle snacks and get as many people as you can involved. This is an awesome way to enjoy your game playing with buddies.<br><br>To enjoy unlimited points, resources, coins or gems, you must have download the clash of [http://www.clanshack.com/ clans hack] into tool by clicking regarding the button. Depending while on the operating system that an individual using, you will need to run the downloaded list as administrator. Give you log in ID and choose the device. If you cherished this information and also you would want to be given more information with regards to [http://circuspartypanama.com clash of clans hack cydia] i implore you to check out our own web site. After this, you are want enter the number behind gems or coins that you want to get.<br><br>Should the system that your tiddler is enjoying on effortlessly connect with the Net, be sure that for you fix the settings for your loved ones before he performs together with. You're going to be capable of safeguard your kid totally from vulnerability to unsavory content utilizing these filter places. There are also options to establish the amount of chatting they can participate individuals when online.<br><br>Actual not only provides complete tools, there is perhaps Clash of Clans chop no survey by anyone. Strict anti ban system take users to utilize this program and play without some hindrance. If people are interested in qualifing for the program, they are definitely required to visit this site and obtain the specific hack tool trainer so now. The name of the internet page is Amazing Cheats. A number of online have different types related to software by which many can get past tough stages in the poker game.<br><br>Make sure that clients build and buy some new laboratory so you can to research improved barbarians. Eventually, in casing you take part in the game for most months, you might finally obtain the nirvana of five-star barbarians.<br><br>You don''t necessarily want one of the reliable troops to win victories. A mass volume of barbarians, your first-level troop, most likely will totally destroy an assailant village, and strangely it''s quite enjoyable to examine the virtual carnage. |
| In [[economics]], the consumer's preferences, monetary income (money) and prices play an important role in solving the consumer's optimization problem (maximization of their [[utility]] subject to a budget constraint). The '''income effect''' in [[economics]] can be defined as the change in consumption resulting from a change in [[real income]].<ref>{{cite book
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| | last = Sullivan
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| | first = arthur
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| | authorlink = Arthur O' Sullivan
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| | coauthors = Steven M. Sheffrin
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| | title = Economics: Principles in action
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| | publisher = Pearson Prentice Hall
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| | year = 2003
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| | location = Upper Saddle River, New Jersey 07458
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| | pages = 80
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| | url = http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4
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| | doi =
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| | id =
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| | isbn = 0-13-063085-3}}</ref>
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| The [[comparative statics]] of consumer behavior investigates the effects of changes in the exogenous or independent variables i.e. prices and money incomes of the consumers on the equilibrium values of the endogenous or dependent variables i.e. the consumer's demand for goods. When the income of the consumer rises with the prices held constant, the optimal bundle chosen by the consumer changes as the feasible set available to him changes. The '''income–consumption curve''' is the set of optimal points of intersection of the points of tangency of the sets of budget constraint lines and indifference curves as income varies, with prices held constant.
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| ==Consumer theory==
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| [[File:Income consumption curve graph.svg|thumb|300px|300px|left|Figure 1: An increase in the income, with the prices of all goods fixed, causes consumers to alter their choice of market basket.]]
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| The income effect is a phenomenon observed through changes in purchasing power. It reveals the change in quantity demanded brought by a change in real income ([[utility]]). The figure 1 on the left, shows the consumption patterns of the consumer of two goods X<sup>1</sup> and X<sup>2</sup>, the prices of which are ''p''<sub>1</sub> and ''p''<sub>2</sub> respectively. The initial bundle X<sup>*</sup>, is the bundle which is chosen by the consumer on the budget line B<sub>1</sub>. An increase in the money income of the consumer, with ''p''<sub>1</sub> and ''p''<sub>2</sub> constant, will shift the budget line outward parallel to itself.
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| In the figure, this means that the change in the money income of the consumer will shift the budget line B1 outward parallel to itself to B2 where the bundle X<sup>'</sup> bundle will be chosen. Again, an increase in the money income of the consumer will push the budget line B2 outward parallel to itself to B3 where the bundle X<sup>"</sup> will be the bundle which will be chosen. Thus, it can be said that, with variations in income of the consumers and with the prices held constant the '''income–consumption curve''' can be traced out as the set of optimal points.
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| {{-}}
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| ==Income–consumption curve for different goods==
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| In the case illustrated with the help of Figure 1 both X<sup>1</sup> and X<sup>2</sup> are [[normal goods]] in which case, the demand for the good increases as money income rises. However, if the consumer has different preferences, he has the option to choose X<sup>0</sup> or X<sup>+</sup> on budget line B2. As the income of the consumer rises,and the consumer chooses X<sup>0</sup> instead of X<sup>'</sup> i.e. if the consumer's indifference curve is I<sup>4</sup> and not I<sup>2</sup>, then the demand for X<sup>1</sup> would fall . In that case, X<sup>1</sup> would be called an [[inferior]] good i.e. demand for good X<sup>1</sup> decreases with a rise in income of the consumer. Thus, a rise in income of the consumer may lead his demand for a good to rise, fall or not change at all. It is important to note here that, the knowledge of preferences of the consumer is essential to predict whether a particular good is inferior or normal.
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| ===Normal goods===
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| [[File:Income consumption curve graph - upward sloping (normal goods).svg|thumb|left|300px|300px|Figure 2: Income-consumption curve for Normal goods]]
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| In the figure 2 to the left, B1, B2 and B3 are the different budget lines and I<sup>1</sup>, I<sup>2</sup> and I<sup>3</sup> are the indifference curves that are available to the consumer. As shown earlier, as the income of the consumer rises, the budget line moves outwards parallel to itself. In this case, from initial bundle X<sup>*</sup>, with an increase in the income of the consumer the budget line moves from B1 to B2 and the consumer would choose X<sup>'</sup> bundle and subsequently, with a further rise in consumer's income the budget line moves from B2 to B3 and the consumer would choose X<sup>"</sup> bundle and so on. And so the consumer would maximize his utility at the points X<sup>*</sup>, X<sup>'</sup> and X<sup>"</sup>, and by joining these points, the '''income-consumption curve''' can be obtained.<ref name="oup.com">http://www.oup.com/us/pdf/microecon/ch04ppt.pdf</ref>
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| The upward sloping income-consumption curve implies that there will be an increase in the demand for both X<sup>1</sup> and X<sup>2</sup> as the income of the consumer rises and will cause the demand curves of the goods to shift to the right.<ref name=P&R>{{cite book|last=Rubinfeld, Pindyck|first=Daniel, Robert|title=Microeconomics|year=1995|publisher=Tsinghua University Press/ Prentice-Hall|location=Mainland China|isbn=7-302-02494-4|pages=699|url=http://books.google.com/books?id=6AE6AAAACAAJ&dq=microeconomics+rubinfeld+and+pindyck+1995&hl=en&ei=DatsTs7fLoTJrAfe77ypBQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCkQ6AEwAA}}</ref>
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| When the income-consumption curve has a positive [[slope]] then the income elasticity of demand will be positive. The greater the shifts of the demand curve to the right, the greater the income-elasticity of demand. In such a case, the goods will be normal goods.<ref name=P&R>{{cite book|last=Rubinfeld, Pindyck|first=Daniel, Robert|title=Microeconomics|year=1995|publisher=Tsinghua University Press/ Prentice-Hall|location=Mainland China|isbn=<!--7-302-02494-4, -->9787302024941|pages=699|url=http://books.google.com/books?id=6AE6AAAACAAJ&dq=microeconomics+rubinfeld+and+pindyck+1995&hl=en&ei=DatsTs7fLoTJrAfe77ypBQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCkQ6AEwAA}}</ref>
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| {{-}}
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| ===Inferior goods===
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| [[File:Income consumption curve graph - downward sloping (inferior goods).svg|thumb|300px|300px|right|Figure 3: with an increase in the income of demand for normal good X<sup>2</sup> rises while, demand for inferior good X<sup>1</sup> falls.]]
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| The figure 3 on the right, shows the consumption patterns of the consumer of two goods X<sup>1</sup> and X<sup>2</sup>, the prices of which are ''p''<sub>1</sub> and ''p''<sub>2</sub> respectively, where B1 and B2 are the budget lines and I<sup>1</sup> and I<sup>2</sup> are the indifference curves. Figure 3 clearly shows that, with a rise in the income of the consumer, the initial budget line B1 moves outward parallel to itself to B2 and the consumer now chooses X<sup>'</sup> bundle to the initial bundle X<sup>*</sup>. The figure shows that, the demand for X<sup>2</sup> has risen from X<sup>2</sup><sub>1</sub> to X<sup>2</sup><sub>2</sub> with an outward shift of the budget line from B1 to B2 (caused due to rise in the income of the consumer). This essentially means that, good X<sup>2</sup> is a normal good as the demand for X<sup>2</sup> rose with an increase in the income of the consumer.
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| In contrast, it is to be noted from the figure, that the demand for X<sup>1</sup> has fallen from X<sup>1</sup><sub>1</sub> to X<sup>1</sup><sub>2</sub> with an outward shift of the budget line from B1 to B2 (caused due to rise in the income of the consumer). This implies that, good X<sup>1</sup> is an inferior good as the demand for X<sup>1</sup> fell with an increase in the income of the consumer.
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| The consumer maximizes his utility at points X<sup>*</sup> and X<sup>'</sup> and by joining these points, the income–consumption curve can be obtained.<ref name="oup.com"/> In figure 3, the income–consumption curve bends back on itself as with an increase income, the consumer demands more of X<sup>2</sup> and less of X<sup>1</sup>.<ref name=econconcepts>http://economicsconcepts.com/application_of_indifference_curves.htm</ref>
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| The income–consumption curve in this case is negatively sloped and the income elasticity of demand will be negative.<ref name="P&R"/> Also the price effect for X<sup>2</sup> is positive, while it is negative for X<sup>1</sup>.<ref name="econconcepts"/>
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| <math>\Delta X_n^1</math> is the change in the demand for good 1 when we change income from <math>m'</math> to <math>m</math>, holding the price of good 1 fixed at <math> p_1</math>:
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| <math>\Delta X_n^1 = X^1(p_1, m) - X^1(p_1,m').</math>
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| {{-}}
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| ===Perfect Substitutes===
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| [[File:Income consumption curve graph - horizontal (perfect substitutes).svg|thumb|300px|300px||right|Figure4: Income–consumption curve for perfect substitutes]]
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| The figure on the right depicts the case of two goods X<sup>1</sup> and X<sup>2</sup> which are [[perfect substitutes]], prices of which are ''p''<sub>1</sub> and ''p''<sub>2</sub> respectively. Here, I<sup>1</sup>, I<sup>2</sup>, I<sup>3</sup>, I<sup>4</sup> and I<sup>5</sup> are the straight line indifference curves, B1, B2 and B3 are the budget constraints and X<sup>*</sup>, X<sup>'</sup> and X<sup>"</sup> are the bundles chosen by the consumer. If it is assumed that, ''p''<sub>1</sub> < ''p''<sub>2</sub> then the consumer would consume only X<sup>1</sup> as this would maximize his utility.<ref name=studentclub>[http://www.commerce.usask.ca/studentclubs/finance/exams/Econ211Chapter%204%20SolutionsStLouis0405.pdf]</ref>
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| In the figure on the right, B1 is the initial budget line and the consumer chooses X<sup>*</sup> as his optimal bundle and as the money income of the consumer rises, his budget line will shift outward and parallel to itself to B2. At the budget line B2 and indifference curve I<sup>4</sup>, the consumer will choose X<sup>'</sup>. Subsequently, as the income rises further, the budget line will again shift outward and parallel to itself to B3, where, the consumer will choose the optimal bundle X<sup>"</sup>.
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| Thus, it can be said that, the amount of good X<sup>1</sup> that the consumer consumes will increase, with an increase in the income of the consumer.<ref name=HRV>{{cite book|last=R Varian|first=Hal|title=Intermediate Microeconomics : A modern approach|year=2006|publisher=W.W. Norton & Co|isbn=0-393-92702-4|pages=754}}</ref> Thus, the income–consumption curve for the perfect substitutes X<sup>1</sup> and X<sup>2</sup> will be the horizontal axis.<ref name="studentclub"/>
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| {{-}}
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| ===Perfect complements===
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| [[File:Income consumption curve graph - linear (perfect complements).svg|thumb|300px|300px|left|Figure 5: Income–consumption curve for perfect complements]]
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| In case of perfect complements, the same amount of goods will be consumed by the consumer irrespective of say income, prices etc.<ref name="HRV"/> As the level of consumption remains the same, the income–consumption curve for perfect complements is the diagonal line passing through the origin as shown in Figure 5 on the left.
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| In the figure on the left, X<sup>*</sup>, X<sup>'</sup> and X<sup>"</sup> are the utility maximization points where the budget constraint lines B1, B2 and B3 touch the kinks of the ''L''-shaped indifference curves I<sup>1</sup>, I<sup>2</sup> and I<sup>3</sup> respectively.<ref name="studentclub"/> And by joining these points of utility maximization, the income–consumption curve for perfect substitutes is obtained.
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| {{-}}
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| ===Cobb–Douglas preferences===
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| The demand functions for both good X<sup>1</sup> and X<sup>2</sup> are linear functions of income and thus, the income-consumption curve will be straight lines through the origin.<ref name=HRV>{{cite book|last=R Varian|first=Hal|title=Intermediate Microeconomics : A modern approach 7th Edition |year=2006|publisher=W.W. Norton & Co|isbn=0-393-92702-4|pages=754}}</ref>
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| If <math> u(X^1, X^2) = X_1^a X_2^{(1-a)}\,</math>
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|
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| Then, the demand for good X<sup>1</sup> will have the form <math>X_1= am/p_1\,</math><ref name="HRV"/>
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| If ''p''1 is kept as a fixed value, then this will be a linear function of m. By doubling ''m'', the demand will double. In fact, if ''m'' is multiplied by any positive number say, ''t'', the demand will be multiplied with the same amount.
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| For good <math> X_2</math>, the demand is given by <math> X_2=(1-a)m/p_2\,</math>.<ref name="HRV"/> This too is clearly linear and thus making the income-consumption curves for both the goods X<sup>1</sup> and X<sup>2</sup> straight lines passing through the origin.
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| ==Income–consumption curve and Engel curves==
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| {{Main|Engel Curve}}
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| At each level of income level, say ''m'', there would an optimal choice for each of the goods. If suppose only the case of a good say, good X<sup>1</sup> is taken, then the optimal choice at each set of prices and income or in other words, the demand function for good X<sup>1</sup> can be written as:
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| <math>X^1=X^1(p_1,p_2,m) \,</math> <ref name="HRV"/>
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| Where,
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| ''p''<sub>1</sub> is the price of good X<sup>1</sup>, ''p''<sub>2</sub> is the price of good X<sup>2</sup> and ''m'' is the income of the consumer. | |
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| If the prices of the goods X<sup>1</sup> and X<sup>2</sup> are held constant and the changes in demand are observed in relation to changes in income, the [[Engel curve]] can be generated. With all prices held constant, the [[Engel curve]] can be defined as a graph depicting the demand for one good as a function of income.
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| <ref name="HRV"/>
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| ==See also==
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| {{Portal|Business and economics}}
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| *[[Consumer theory#Income effect]]
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| *[[Price–consumption curve]]
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| *[[Engel Curve]]
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| ==References==
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| {{Reflist}}
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| {{Microeconomics}}
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| {{DEFAULTSORT:Income Effect}}
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| [[Category:Economics]]
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| [[Category:Economics terminology]]
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| [[Category:Consumer theory]]
| |
30 seconds a rechargeable battery towards your wireless gaming controller. You can buy regular power supplies for much controller. If you are going to play video games regularly, you will be eating food through a small wealth in the batteries comfortable with run your controllers. A rechargeable battery could help you save a lot of make the most the long run.
Hang on to a video game champion. These can be a lot attached to fun for you and your gaming friends. Either you do this online, at your house . or at a buddy's place. Serve a chuckle snacks and get as many people as you can involved. This is an awesome way to enjoy your game playing with buddies.
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Actual not only provides complete tools, there is perhaps Clash of Clans chop no survey by anyone. Strict anti ban system take users to utilize this program and play without some hindrance. If people are interested in qualifing for the program, they are definitely required to visit this site and obtain the specific hack tool trainer so now. The name of the internet page is Amazing Cheats. A number of online have different types related to software by which many can get past tough stages in the poker game.
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You dont necessarily want one of the reliable troops to win victories. A mass volume of barbarians, your first-level troop, most likely will totally destroy an assailant village, and strangely its quite enjoyable to examine the virtual carnage.