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Consider an economy with two goods only. Use Slutsky decomposition for good 2 (x2 = x2^s + x2^i) to prove the following: (a) If the

Consider an economy with two goods only. Use Slutsky decomposition for good 2 (x2 = x2^s + x2^i) to prove the following: (a) If the price of good 1 decreases and good 2 is inferior, then good 2 is a gross substitute for good 1. (b) If the price of good 1 decreases and good 2 is normal, then under what condition is good 2 still a gross substitute for good 1? Under what condition is good 2 a gross complement for good 1?

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