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 Əzi Ər₂ дрг - др where, for each i = 1,2, z; denotes the Marshallian demand for good i and p; denotes the price of good i.

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 Əzi Ər₂ дрг - др where, for each i = 1,2, z; denotes the Marshallian demand for good i and p; denotes the price of good i.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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