An Analysis Of The Substitution Effect And Of Revenue Effect In The Case Of The Consumers Theory Provided With An Allen Utility Function

Journal of Accounting and Management JAM vol. 4, no. 3(2014) An analysis of the substitution effect and of revenue effect in the case of the consumer’s theory provided with an Allen utility function Cătălin Angelo IOAN1 Gina IOAN2 Abstract. In the... More

Journal of Accounting and Management JAM vol. 4, no. 3(2014) An analysis of the substitution effect and of revenue effect in the case of the consumer’s theory provided with an Allen utility function Cătălin Angelo IOAN1 Gina IOAN2 Abstract. In the consumer’s theory, a crucial problem is to determine the substitution effect and the revenue effect in the case of one good price’s modifing. There exists two theories due to John Richard Hicks and Eugen Slutsky which allocates differents shares of the total change of the consumption to these effects. The paper makes an analysis between the two effects, considering the general case of an Allen utility function. Keywords: Allen, substitution, revenue, utility 1 Introduction A central point of the producer’s theory is the study of manufacturer production functions [1], [3], [6], [7]. In the consumer’s theory, an important problem is to determine the substitution effect and the revenue effect in the case of one good price’s modifing. The theory Less