Suppose the Marshallian own price elasticity of demand for soda pop is -1.3 and the Hicksian own price elasticity of demand for soda pop is -0.9. Use indifference curves and budget constraint analysis to illustrate the income and substitution effects necessary to produce these elasticity measures. From this, is soda pop a normal or inferior good? Explain.
Suppose the Marshallian own price elasticity of demand for canned vegetables is -0.2 and the Hicksian own price elasticity of demand for canned vegetables is -0.8. Use indifference curves and budget constraint analysis to illustrate the income and substitution effects necessary to produce these elasticity measures. From this, are canned vegetables a normal or inferior good? Explain.