[MAE]Summary on 11/16/09

Summary of MAE on 11/16/09

2 goods (i, j are related goods)

∆pi = ∆gi

I & j could be

–          Complement (-)

–          Substitutes (+)

Income elasticity

Categories of income elasticity

  • Superior goods

EY > 1

  • Normal goods

0 < EY < 1

  • Inferior goods

EY < 0

Elasticity of Supply

If the supply curve slopes upward and to the right, the coefficient of supply elasticity is a positive number.

Next time:

Do question in our book of MAE of Chapter 4.

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~ by Rithy Pheath on 11/17/2009.

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