Determine the slutsky equation, Microeconomics

Assignment Help:

Determine the Slutsky Equation.

Income-Substitution Effect: The Slutsky Equation

A fall into the price of a good may have two sorts of consequences: substitution effect, when one commodity will become less expensive than other and income effect when total “purchasing power” rises. A basic result of the theory of the consumer, the Slutsky equation, associates these two consequences. Even if the compensated demand function is not directly observable, see that its derivative can be simply computed from observable things, name as, the derivative of the Marshallian demand regarding price and income. Such relationship is termed as the Slutsky equation.

1458_Slutsky Equation.png


Related Discussions:- Determine the slutsky equation

Determinants of private demand - ability to pay, Determinants of Private De...

Determinants of Private Demand - Ability to Pay In a developing country like India, of all the factors determining investments in education, the most important factor is the ‘

Divisional structure, Divisional Str ucture Some organizations...

Divisional Str ucture Some organizations run as a number of divide, autonomous business units, synchronized by a central headquarters. This is a divisional structure.

Explain demand curve and fiscal policy, 1. Explain externality, how can gov...

1. Explain externality, how can government intervene to achieve allocative efficiency in case of external cost or external benefit? 2. Explain oligopoly's structure and use game t

How a country exchange rate influence balance of payment, How might a count...

How might a country exchange rate influence the balance of payments? Definition of the exchange rate; price of domestic currency in another (basket of) currency (currencies). C

What caused the productivity slowdown, What caused the productivity slowdow...

What caused the productivity slowdown?  Observers have pointed to 4 factors--Oil prices, baby boom, increased problems of economic measurement and environmental protection expe

Determine optimal price, Determine Optimal Price, Quantity and Economic Pro...

Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function:  AC=MC=10 and a potential entrant has a cost function: AC=MC

Matter and the three basic states, how can I execute this topic in new way ...

how can I execute this topic in new way of teaching? That will focus on activity base and art of questioning that will answer by the students?

Natural rate of unemployment, Natural Rate of Unemployment: According to ne...

Natural Rate of Unemployment: According to neoclassical economics, wage rate is determined by a process of labour-market clearing (in which employers and workers compete with each

What are the properties of consumer demand, What are the properties of cons...

What are the properties of consumer demand? Properties of Consumer Demand: In this section check the comparative statics of consumer demand behaviour as: how the demand of cons

Labour supply, Discuss how the opportunity cost principle influence a suppl...

Discuss how the opportunity cost principle influence a supplier''s decision to supply labour

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd