III. (5 points) Suppose Bronn’s preferences
over :6 and y can be described by the utility function u(:c;y) =
min{:c;3y}. Then the substitution effect of a price increase in
good :6 is (hint: Use a graph to guide your answer) (a) negative
and larger than the income effect; (b) negative and smaller than
the income effect; (c) positive and smaller than the income effect;
( d) zero.
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