If a consumer is a buyer of some goods and a seller of others, then a change in prices will generate an extra income effect in the Slutsky equation due to the revaluation of the consumer's endowment.

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The extra income effect occurs when a price change of one good affects the demand for another good, leading to a revaluation of the consumer's endowment. If a consumer is both a buyer and seller of goods, a change in prices of both the bought and sold goods will cause a revaluation of their overall endowment and generate an extra income effect.

If a Consumer Is a Buyer of Some Goods and a Seller