When the price of a particular good increases, consumption of that good almost always falls, and vice versa. In this section, we want to look a bit more closely at exactly what happens when a price changes.

   Suppose you enjoy going to the movies and dining out. If the price of going to see a movie increases (and nothing else changes), you might go to fewer movies. A price change like this has two important effects.

   Your entertainment budget won't buy you as much as it used to, because movies cost more; therefore, it's as if your income was reduced. This might cause you to go to fewer movies (we'll assume that movies are a normal good for most people). This is called the income effect of a price change or just the income effect for short (but keep in mind, the only thing that changed was price).

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