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Economics

Question: Discuss which of the following statements is true or false and explain why:

(a) a good is inferior if the quantity demanded of it falls as the price falls;

(b) a good is inferior only if the quantity of it falls as the price falls; (Students may wish to read Chapter 3 before answering questions (c) to (e).)

(c) a good is inferior if the Hicks compensated demand curve cuts the normal (money income) demand curve from above (students might wish to read Chapter 3 before answering this part of the question);

(d) a good is inferior if the Slutsky compensated demand curve cuts the normal (money income) demand curve from below (students might wish to read Chapter 3 before answering this part of the question);

(e) a good is inferior if the Hicks compensated demand curve cuts the Slutsky compensated demand curve from above.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M92313610

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