2a. Consider two goods: x and y where y is a composite good. Suppose that x...
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2a. Consider two goods: x and y where y is a composite good. Suppose that x is a Giffen good. Graphically derive the demand curve for this Giffen good based on the indifference curve framework by working out the optimal consumption choices when the price of good x changes. 2b. Do Giffen goods exist in reality? Explain. 2a. Consider two goods: x and y where y is a composite good. Suppose that x is a Giffen good. Graphically derive the demand curve for this Giffen good based on the indifference curve framework by working out the optimal consumption choices when the price of good x changes. 2b. Do Giffen goods exist in reality? Explain.
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2a Because Giffen commodities are often inferior or have no close substitutes the income effect ... View the full answer
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