Income and Substitution Effects Panel A of Figure APX-4 is reproduced in this figure. The price of climbing having risen to $30 per hour, this effectively reduces your budget to $40 per week, assuming you continue climbing as much as you did before. Line gh represents a new budget of $40, though reffecting the old price of climbing. This new budget line gh allows us to divide the total change in purchases into the income and substitution effects. Increasing the price of wall climbing from $20 to $30 an hour would mean a reduction in wall climbing (holding income constant at $40) from point f to point b. This is the substitution effect. The income effect is thus the reduction in consumption from point a to point f. Adding both effects together yields the total reduction.