2. Consider the Ex-min problem for n=2 goods case.Oh, oh, oh, oh, oh₂ h₂."диди др, др, др, дргa. Calculateb. Show that.ah, әһ,др.c. Show that if<0, <0, andдр,дһ,дһ,др, др.=ah,->0, good 1 is a normal good.диOxдр,|du=0=дx,др,|du=0> 0.

Q 2. The expenditure minimization is the dual problem to the utility maximization by a consumer. In…

a. Calculate oh, oh, oh, oh, oh, oh₂ " ди’ ди’дру`дрг др, дрг b. Show that әһ, др. c. Show that if <0, ah, " 2 <0, and дрг ah, др г = дһ, ox, др. дрг = дһ, ->0, good 1 is a normal good. ди ах, др. |du=0 |du=0 >0.

a. Calculate oh, oh, oh, oh, oh, oh₂ " ди’ ди’дру`дрг др, дрг b. Show that әһ, др. c. Show that if <0, ah, " 2 <0, and дрг ah, др г = дһ, ox, др. дрг = дһ, ->0, good 1 is a normal good. ди ах, др. |du=0 |du=0 >0.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

2. Consider the Ex-min problem for n=2 goods case.
Oh, oh, oh, oh, oh₂ h₂
.
"
диди др, др, др, дрг
a. Calculate
b. Show that
.
ah, әһ,
др.
c. Show that if
<0, <0, and
др,
дһ,
дһ,
др, др.
=
ah,
->0, good 1 is a normal good.
ди
Ox
др,
|du=0
=
дx,
др,
|du=0
> 0.

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