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Questions › DSE › DSE 2011 › Q43
2 marksMicroeconomics › Demand theory and elasticity › Income and substitution effects: the Slutsky equationHardabout 4 min

DSE 2011 Question 43: Demand theory and elasticity

A consumer spends Rs. 100 on only two goods, A and B, with non-satiation. The price of B is fixed at Rs. 20. When the price of A is Rs. 10, the consumer buys 3 units of B. When the price of A is Rs. 20, she buys 5 units of A. From this we can conclude that for the relevant price range

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Demand theory and elasticity has come up 161 times in 7 exams since 2004.

What this question tests

This question is on Income and substitution effects: the Slutsky equation, part of Demand theory and elasticity in Microeconomics.

Splitting a price change into a substitution effect and an income effect, and why Giffen goods break the law of demand.

TestStop has 29 past-paper questions on this subtopic.

Practise Demand theory and elasticityMore on Income and substitution effects: the Slutsky equation

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