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28 Sep 2019
Consider the following statements about demand curves, normal and inferior goods, and substitution, income, and gross effects. Evaluate whether each statement is true or false, explaining why you reach this conclusion. (a) All inferior goods are Giffen goods. (b) All Giffen goods are inferior goods. (c) A good x that has a downward-sloping demand curve must be a normal good. (d) Any good x that has a downward-sloping demand curve must have a substitution effect that is larger in absolute value than the income effect (that is, |SE| > |IE|). (e) When Px falls, the substitution effect on x is larger in size if x is a normal good than if x is an inferior good.
Consider the following statements about demand curves, normal and inferior goods, and substitution, income, and gross effects. Evaluate whether each statement is true or false, explaining why you reach this conclusion. (a) All inferior goods are Giffen goods. (b) All Giffen goods are inferior goods. (c) A good x that has a downward-sloping demand curve must be a normal good. (d) Any good x that has a downward-sloping demand curve must have a substitution effect that is larger in absolute value than the income effect (that is, |SE| > |IE|). (e) When Px falls, the substitution effect on x is larger in size if x is a normal good than if x is an inferior good.
viclere2005Lv10
9 May 2023
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RonaldLv2
28 Sep 2019
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