7.8 Show that for a two-good world, sX eX,PX sY eY,PX sX. If the own-price elasticity...

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7.8 Show that for a two-good world, sX eX,PX sY eY,PX  sX.

If the own-price elasticity of demand for X is known, what do we know about the cross-price elasticity for Y ? (Hint: Begin by taking the total differential of the budget constraint and setting dI  0  dPY.)

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