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This question asks you to compare the Slutsky equations for the consumer's model with monetary income (CM) and for the consumer's model with endowments (CE).
This question asks you to compare the Slutsky equations for the consumer's model with monetary income (CM) and for the consumer's model with endowments (CE). Consider the demand for good x and how this demand changes as the price of good x increases Oa. In both the CM and the CE models, if x is a normal good, then the demand for good x must decrease O b. Suppose x is a normal good. While in the CM model the demand for good x must decrease, in the CE model the demand for good x may increase if the consumer is a net seller of good x before the change in price Oc. Suppose x is a normal good. While in the CM model the demand for good x must decrease, in the CE model the demand for good x may increase if the consumer is a net buyer of good x before the change in price O d. Suppose x is a normal good. While in the CM model the demand for good x must increase, in the CE model the demand for good x may decrease if the consumer is a net buyer of good x before the change in price Oe. In both the CM and the CE models, if x is an inferior good, then the demand for good x must increase
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