{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

review_ch6

review_ch6 - 7 8 CHAPTER 6 REVIEW DEMAND 6.5 Price oﬀer...

This preview shows pages 1–9. Sign up to view the full content.

Chapter 6 Review: Demand The consumer’s demand function can be written as x 1 = x 1 ( p 1 ,p 2 ,m ) 6.1 Normal and inferior goods For a normal good, the quantity demanded always changes in the same direction as income (e.g., if income increases, quantity demanded increases, and vice versa.) 4 x 1 4 m > 0 1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
2 CHAPTER 6. REVIEW: DEMAND For an inferior good, 4 x 1 4 m < 0
6.1. NORMAL AND INFERIOR GOODS 3

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
4 CHAPTER 6. REVIEW: DEMAND 6.2 Income oﬀer curves and Engel curves
6.3. EXAMPLE WITH COBB-DOUGLAS PREFERENCES 5 6.3 Example with Cobb-Douglas preferences

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
6 CHAPTER 6. REVIEW: DEMAND 6.4 Ordinary goods and Giﬀen goods
6.4. ORDINARY GOODS AND GIFFEN GOODS

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 7 8 CHAPTER 6. REVIEW: DEMAND 6.5 Price oﬀer curves and the demand curve 6.6 Substitute and complements If the demand for good 1 goes up when the price of good 2 goes up, then we say that good 1 is a substitute for good 2. In terms of rates of change, good 1 is a substitute for good 2 if 4 x 1 4 p 2 > On the other hand, if the demand of good 1 goes down when the price of good 2 goes up, we say good 1 is a complement to good 2. This means that 6.7. THE INVERSE DEMAND FUNCTION 9 4 x 1 4 p 2 < 6.7 The inverse demand function...
View Full Document

{[ snackBarMessage ]}

Page1 / 9

review_ch6 - 7 8 CHAPTER 6 REVIEW DEMAND 6.5 Price oﬀer...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online