Microeconomics - Economics Live

Law of Variable Proportion

The law of variable proportion occupies an important place in economic theory. This law examines the production function with one factor variable, keeping the quantities of other factors fixed. In other words, it refers to the input-output relation when output is increased by varying the quantity of one input. When … read more

Slutsky Equation (Theorem)

by Economics Live

A change in the price and income alters the consumer’s expenditure pattern. So to know the consumer’s expenditure pattern due to changes in price and income, all the variables should be varied simultaneously. Let, Utility function be Subject to Or Here we can form a new function with the help … read more