# (8pts) Suppose that Sam has a utility ﬁmction u(x, y): x+1g where x is the amount of good 1 and y is the amount of good 2. The price of

(8pts) Suppose that Sam has a utility ﬁmction u(x, y): x+1g where x is the amount of good 1

and y is the amount of good 2. The price of good 2 is $20, and the income is $ 90. With the $20 price decrease of good 1 from $30 to $10, then what is the substitution effect and

income effect on the demand for good 1? With the $5 price decrease of good 1 from $10 to $5, then what is the substitution effect and

income effect on the demand for good 1? use the Slutsky style substitution effect and income effect.