Exploring the Two Commodity World
This paper attempts to explore the nature of the goods in a Two Commodity world. The analysis suggests that the only possibility that the two goods have same income elasticity is the case when both goods have unit income elasticities. Moreover, if both the goods have equal income elasticities, then these goods will belong to the same category and will be in equal relation to each other. The analysis further suggests that if one of the good has zero income elasticity, it will always be a substitute to the other good which will always be an elastic good. These results are supported by the CES and Quasi-linear utility functions.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:5656. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.