## Slutsky and Hicks Decompositions - General Dynamics

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[Ordinary and Superior Good] [Ordinary and Inferior Good] [Giffen and Inferior Good]

To manipulate *p*_{x} (price of good X), *p*_{y} (price of good Y) or *m* (income), slide the blue buttons in the yellow field. See how the budget line changes. Also note that this influences the
optimum point. You can restore the applet by clicking on the symbol in the upper right corner.

Made by Dr. Jens Peter Siebel with GeoGebra.

**In general:**

- For given
*p*_{x}, *p*_{y} and *m* the budget line has axes intercepts at *x=m/p*_{x} and *y=m/p*_{y}.
- For given
*p*_{y} and *m* a rising (falling) *p*_{x} shifts the x-axis intercept leftward (rightward).
- For given
*p*_{x} and *m* a rising (falling) *p*_{y} shifts the y-axis intercept downward (upward).
- For given
*p*_{x} and *p*_{y} a rising (falling) *m* parallel shifts the budget line further away from the origin (closer to the origin).

Last update: 04/05/2011