is four The price of Salternative, a salt substitute, falls and we find that the substitution effect =0/9 while the income effect is five 4 units of Salternative Wille 5 units of Salternative Aw shucks! Those dreadful little logomen are blocking out the plus and/or minus signs. In other words, we do not know the direction of the effects, but only their magnitude. a. If Salternative is a normal good, the total change in quantity demanded will be Please write in a minus sign if one is warranted. b. If Salternative is an inferior good, the total change in quantity demanded will be Please write in a minus sign if one is warranted. c. Could Salternative be a Giffen good? In a sentence or two, briefly explain why or why not.
is four The price of Salternative, a salt substitute, falls and we find that the substitution effect =0/9 while the income effect is five 4 units of Salternative Wille 5 units of Salternative Aw shucks! Those dreadful little logomen are blocking out the plus and/or minus signs. In other words, we do not know the direction of the effects, but only their magnitude. a. If Salternative is a normal good, the total change in quantity demanded will be Please write in a minus sign if one is warranted. b. If Salternative is an inferior good, the total change in quantity demanded will be Please write in a minus sign if one is warranted. c. Could Salternative be a Giffen good? In a sentence or two, briefly explain why or why not.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:is four
The price of Salternative, a salt substitute, falls and we find that the substitution effect
while the income effect is five
4 units of Salternative
5 units of Salternative
Aw shucks! Those dreadful little logomen are blocking out the plus and/or minus signs. In other
words, we do not know the direction of the effects, but only their magnitude.
C.
a. If Salternative is a normal good, the total change in quantity demanded will be
Please write in a minus sign if one is warranted.
b. If Salternative is an inferior good, the total change in quantity demanded will be
Please write in a minus sign if one is warranted.
Could Salternative be a Giffen good? In a sentence or two, briefly explain why or why not.
Expert Solution
Step 1
Given
The price of Salternative falls so the substitution effect is 4 and the income effect is 5 units of Salternative.
Definations:
A normal good: A good is said to be normal good if its demand increase as income increases.
An inferior good: A good is said to be inferior good is its demand decrease as income increase.
Giffen good: An inferior good is said to be Giffen good if its demand decrease as price decrease.
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