## Slutsky and Hicks Decompositions - Ordinary and Inferior Good

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

To change the price of good X from its initial value *p*_{xA}, slide the blue *p*_{x}-button in the yellow field. You can restore the applet by clicking on the symbol
in the upper right corner.

Made by Dr. Jens Peter Siebel with GeoGebra.

The utility function here is a slight modification of a function by Wold and Juréen (1953). As good X is inferior, the income effect pulls in the direction opposite to the substitution effect. However, in the case here,
good X is ordinary, because the substitution effect overcompensates the income effect.

**References:**

Wold H. and Juréen L. 1953. *Demand Analysis: A Study in Econometrics.* New York: Wiley.

Last update: 04/05/2011