In: Economics
(a) Write the own price Slutsky equation in derivative form
(b) Use this to evaluate the following statement: “If an increase in income has no effect on demand for a good, then the demand function can have either a positive or negative slope.”
(c) Use the equation from (a) again to derive the elasticity form of the Slutsky equation. Hint: The elasticity form of the Slutsky equation should include the following elasticities: εM x,px , the Marshallian own-price elasticity for good x, ε H x,px , the Hicksian own-price elasticity for good x, and ηx, the income elasticity for good x
According to the question below given image contains own price slusky equation in derivation form and the evaluation on mentioned statement.