imagine you are living in a two-good-economy consuming only love and hate when your income, which is time in our case, is constant. the prices of emotions may be defined as how much time you have to give up for the enjoyment. if somehow the price of love falls down you are likely to consume more love and less hate than before, the substitutionEffect. Putting the incomeEffect in to scenario you will see that you will consume both of the goods more. simple and easy...
so don`t forget the power of incomeEffect when you fall in cheap love :))))
1 comment:
so,you do assume that both are normal goods?isn't hate an inferior good?
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