Which of the following is an important difference between Marshallian demand and Hicksian demand? Marshallian demand focuses on utility maximisation, whereas Hicksian demand focuses on income minimisation. Marshallian demand focuses on maximising total utility, whereas Hicksian demand focuses on maximising marginal utility. O Hicksian demand considers the substitution effect only, while Marshallian demand takes into account both the income and substitution effects. Marshallian demand takes the concept of 'inferior goods' into account, whereas Hicksian demand does not. More than one of the above.

Which of the following is an important difference between Marshallian demand and Hicksian demand? Marshallian demand focuses on utility maximisation, whereas Hicksian demand focuses on income minimisation. Marshallian demand focuses on maximising total utility, whereas Hicksian demand focuses on maximising marginal utility. O Hicksian demand considers the substitution effect only, while Marshallian demand takes into account both the income and substitution effects. Marshallian demand takes the concept of 'inferior goods' into account, whereas Hicksian demand does not. More than one of the above.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter20: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 3CQ: Recent research confirms that the demand for cigarettes is not only inelastic, but it also indicates...

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Which of the following statements is false? O The Marshallian demand curve will only slope downwards for a normal or non-Giffen inferior good. O The Hicksian demands are compensated demands and depend on prices and utility. O The Slutsky substitution effect keeps utility constant, following a price change. O The income effect outweighs the substitution effect for a Giffen good. O The expenditure function maps prices and utility to minimal expenditure. O No answer.
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