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The average Maine household has a demand function for firewood, x1, in cords. m I.5 200 X = + P where m = $1,532.62 The
The average Maine household has a demand function for firewood, x1, in cords. m I.5 200 X = + P where m = $1,532.62 The price of a cord of firewood rises from $100 to $120. Calculate the (Slutsky) income and substitution effects. Enter numbers only, and round to two decimals (where needed) The original quantity demanded, x1 , is_ 8.00 and the new quantity demanded, x1 , is 5.82 Compensated income, m, is 1424.2 and Slutsky demand, x1, is 7.37 The Slutsky income effect is and the Slutsky substitution effect is
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