0
$\begingroup$

Putting price on the vertical axis and quantity on the horizontal axis, is the Slutsky demand steeper or flatter than the Hicksian demand curve? If I calculate the Slutsky and Hicksian substitution effects for a normal good (Cobb-Douglas), I get Slutsky substitution effect greater than Hicksian substitution effect. Shouldn' t that mean that Hicksian demand is steeper than Slutsky? I have seen the opposite being drawn in some lecture notes.

enter image description here

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.