ECON 3030 Chapter Notes - Chapter 6-7: Engel Curve, Demand Curve, Statics
8 Jan 2018
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Comparative statics is studying how a choice responds to changes in the economic environment. The income o er curve is created by connecting the chosen bundle at di erent incomes. An engel curve shows how the demand for a good changes with income. A good is a gi en good when a reduction in its price leads to a reduction in the demand for the good. The price o er curve is created by connecting the bundles chosen at di erent prices. A demand curve shows how the demand for a good changes with price. Econ 3030 - chapter 07 - revealed preferences. If p1x1 + p2x2 p1y1 + p2y2 is satis ed then we say the bundle x is directly revealed preferred to bundle y. The principle of revealed preference: let (x1, x2) be the chosen bundle when prices are (p1, p2) and let (y1, y2) be some other bundle such that.
