Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good 1 of a marginal increase in the price of good 2 cannot exceed the total effect on demand for good 2 of a marginal increase in the price of good 1. That is, prove that where, for each i = дх1 Әрг Əx2 др1 1,2, x denotes the Marshallian demand for good i and p; denotes the

Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good 1 of a marginal increase in the price of good 2 cannot exceed the total effect on demand for good 2 of a marginal increase in the price of good 1. That is, prove that where, for each i = дх1 Әрг Əx2 др1 1,2, x denotes the Marshallian demand for good i and p; denotes the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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