Description
Two variants of the famous graphical technique theoretically decomposing the reaction of a consumer to a change in price of a consumption commodity into the so-called substitution effect and income effect, were originally found in the works of E. Slutsky and J. R. Hicks. Today, the technique has become one of the most popular topics , in all microeconomics textbooks.
This monograph presents a thorough re-examination of the concept of "real income", the controversial core subject differentiating the variants of Slutsky and of Hicks. A systematic methodology is employed to disintegrate the technique into its ingredients, each of which is dealt with in separate chapters, thus enabling performance of close scrutiny and revaluation of the theory from various facets. The analysis results in a new interpretation of real income", and as a consequence, a third approach to the technique is born and is tentatively proposed to the literatus. It will serve as a piece of beneficial reading material to university and college students at all levels who are pursuing the course in economics.
To facilitate the readers' understanding on the paper, a two-part addendum is annexed to the monograph. Part A presents the historical back- ground of economics, flourished with anecdotes and major events. Part B lays out the wonderful story about the evolution of consumer behaviour theory. It is suggested that non-economics students should read the addendum before starting on the main text. ISBN:9839839489
