So far we have that i. and s. effects are useful to
a) teach Marshallian demand
b) teach difference between nominal and real income
c) students going on to graduate school
d) useful but for reasons that can't be remembered! :)
e) useful as a hurdle/signal
f) not useful at the intermediate/mba
I'm not disagreeing, but I am curious: what would you
teach instead?
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knowing what i and s effects are all about teaches people to evaluate
which types of tax cuts will entail higher production - and which types
of tax cuts will do the reverse...
jacob braestrup
danish taxpayers association
So far we have that i. and s. effects are useful to
a) teach
I do agree that one of the few applications of i. and s. effects is to
labor supply (this was mentioned in my first post). (This is because
labor is one of the few goods where the income effect is likely to be
large.) Hence that is the context in which I teach the material. It is
appalling,
Hi Alex,
I cannot point with conviction to any example of a Giffen
consumption good and I don't consider it to be a very important
consideration. My claim was not that any demand curves _do_ slope up,
but that you want your students to know that it is a logical possibility
and what is required
Alex,
I believe that it is certainly worth the trouble for students who go on to
graduate studies, and perhaps for others as well. I usually discuss
Friedman's Marshallian Demand curve piece and the income/substitution effect
conversation is necessary for this. In addition, it just helps
