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Can you help me out with finding the proper solutions for the questions below? Thanks. Problem 1 We have seen that for utility of the
Can you help me out with finding the proper solutions for the questions below? Thanks.
Problem 1 We have seen that for utility of the form that demand is equal to (a) Write down the Slutsky equation in derivative form. (b) Solve for the substitution effect: (or depending on which notation you prefer). There's more than one way you can M)lve this problem. One way is to specify the Slutsky demand equation like we did in class. But that might not be the easiest way. Hint: What components of the Slutsky equation can you calculate right away, without defining a new function? (c) What share of the total effect is the substitution What share is the income effect? I
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