Re: micro-consumer theory

Posted by anon_econ on Oct 30, 2011; 9:37am
URL: http://discussion-forum.276.s1.nabble.com/micro-consumer-theory-tp6943878p6945257.html

Why r u assuming that the price offer curve shows u only what happens when px changes? It actually shows u what happens when px/py changes. Say px is kept constant & py keeps rising. The budget constraint keeps becoming flatter but the quantity of y remains unchanged.
I think the demand curve for good y would be vertical & that for good x would be downward sloping.

I don't know about the inferior good question..if it's an ordinary good, I can't see why there wud not be any consumer surplus. Dunno what happens if it's a giffen good though..