Deconstructing a Price Change Observation
An economist observes that after the price of public transportation tickets increases, a particular commuter continues to purchase the exact same number of tickets. The economist concludes that for this commuter, the substitution effect of the price change is zero. Based on the properties of standard, convex indifference curves, explain why this conclusion is necessarily incorrect. What must be true about the other component of the price effect for the economist's observation to hold?
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