what does it mean by “ordinary” when the good is already identified as “inferior good”
8. Good x is an inferior good, but not a Giffen good for Emily. For a small increase in price of the good x, which of the following statement is correct? (a) Both the income effect and substitution effect are negative. (b) Both the income effect and substitution effect are positive. (c) The total effect is less negative than the substitution effect in absolute value. ANSWER (d) The total effect is more negative than the substitution effect in absolute value l). 9 (P. P.1) Solution • The slutsky equation is : 09 – OCP 🙂 – ( p • the good x is inferior so – 9 :0.9.(P.Py, 1) > 0 • the good x is ordinary so 0 :1 (Pl). As they are both negative,

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