this income effect movement.

Now, put the substitution and income effects together. When the price of pizza increased, Ogden consumed

less of it, for two reasons shown in the exhibit: the substitution effect of the higher price led him to consume
less and the income effect of the higher price also led him to consume less. However, when the price of pizza
increased, Ogden consumed the same quantity of haircuts. The substitution effect of a higher price for pizza

meant that haircuts became relatively less expensive (compared to pizza), and this factor, taken alone, would

have encouraged Ogden to consume more haircuts. However, the income effect of a higher price for pizza

meant that he wished to consume less of both goods, and this factor, taken alone, would have encouraged

Ogden to consume fewer haircuts. As shown in Figure B4, in this particular example the substitution effect and
{"title": "Principles of Microeconomics 3e", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "creationdate": "2022-12-07T14:15:44-06:00", "moddate": "2022-12-07T14:23:05-06:00", "file_size_mb": 26.99, "creator": "PDFMiner", "uploaded_via": "batch_uploader", "producer": "Prince 14.2 (www.princexml.com)", "upload_timestamp": "2026-02-07T15:37:44.339247", "batch_upload": true, "file_type": ".pdf", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "total_pages": 597, "file_name": "Microeconomics3e.pdf"}