Question ?

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2 total messages Started by Alexandros Hatziandreou Thu, 19 Nov 1998 00:00

Author: Alexandros Hatziandreou
Date: Thu, 19 Nov 1998 00:00

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I happen to have this question, which is due to be answered rather soon
...
I could use all the help I can get :

Q: With reference to indifference curve analysis illustrate and identify
the income and substitution effects for good X (to be drawn on the
horizontal axis).
Assume X to have a 0 income elasticity of demand. By drawing a
price/quantity graph directly below the indifference diagram, derive the
relevant demand curve.


Thanks in advance,
The OUG.

Re: Question ?

Author: Oshima Kosuke
Date: Fri, 20 Nov 1998 00:00

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<36547760.F857F316@oug.prestel.co.uk>$B$N5-;v$K$*$$$F(B
ahatziandreou@oug.prestel.co.uk$B$5$s$O=q$-$^$7$?!#(B

>> Q: With reference to indifference curve analysis illustrate and identify
>> the income and substitution effects for good X (to be drawn on the
>> horizontal axis).
>> Assume X to have a 0 income elasticity of demand. By drawing a
>> price/quantity graph directly below the indifference diagram, derive the
>> relevant demand curve.
>> 

I think the answer to the latter is a downward-
sloping curve because of the offer curve starting at
some point on the horizontal axis, going up north-
west, no backward-bending.

Oshima@Toyonaka city

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