There is another way to decompose the price effect. For simplicity consider a consumer with fixed income m. The Hicks decomposition involves pivoting the budget line around the initial indifference curve rather than the initial bundle. The diagram below illustrates for a price decrease in good 1
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Announcements: Power Point Lecture Notes Available on BCMP200 Website For further reading Nucleic Acids: Structures, Properties, and Functions V.A. Bloomfield D. M. Crothers