At the local supermarket, Angela observes that the price of apples is $2 while the price of bananas is $1. Angela buys 5

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At The Local Supermarket Angela Observes That The Price Of Apples Is 2 While The Price Of Bananas Is 1 Angela Buys 5 1 (58.39 KiB) Viewed 22 times

At the local supermarket, Angela observes that the price of apples is $2 while the price of bananas is $1. Angela buys 5 apples and 5 bananas. On the way home she runs into her neighbour, Kevin, a known banana fanatic. He offers her 1 apple in exchange for 1 banana. Although Angela is personally indifferent to the proposition-- she would be just as happy if she made the trade as if she didn't--she quickly agrees to the exchange so that Kevin will stop pestering her. The next week, Angela notices that the price of apples at the supermarket has decreased to $1. Bananas are still $1 each. She buys 12 apples and 3 bananas, then walks home by a different route to avoid the bothersome Kevin. The week after that, Angela notices that the prices of both apples and bananas have risen to $1.50. She buys 6 apples and 4 bananas. When the price of apples fell from $2 to $1, while the price of bananas held steady at $1, what was the income effect on Angela's consumption of apples?