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University of Waterloo
ECON 201
Corey Van De Waal

empirical InGoodInempiricalGood this course for GiffenGiffen a of case no evidence that GiffenGoods exist in is positively related to the price change etical construct in directions and demand will be upward decomposition works using our graphing specialLECTURE 7 very the is inferior that its income effect more than offsets the opposite scenario ThisscenarioistheveryspecialcaseofaThissubstitution effect then the total effect price and quantity move in the sameEGiffenGoods as a Very Special CaseThe SlutskyEquation continuedIf good X is SOslopingslopinganalysisanalysisstudies researchers have found little or realityThey are presented as a theorcompletenessLets see how this X noX FC BLto A TE the C we want to account for the BLXTherefore ShiftThis is the move from A to B B to A PivotOfrom BLSE Blonger displays the negative relationship between PHowever for a Giffen good the income effect from B to C is negative and strong enough to more than offset theSEfromAtoBThereforetheTEAtoCnotheand X resulting in an upward sloping demand curveSEanalysis IEATEprior Cour to The Slutsky Equation continuedEGiffen Goods as a Very Special CaseWhen we decompose the partial effect of a fall in Psimilartoourprioranalysissimilarchange due to the new relative prices SEYYYYPP MPMM
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