Use the Slutsky equation to show that a Giffen good must be an inferior good,BUT an inferior good need not be a Giffen good.

Question

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The Answer is The Slutsky equation may be written as dQ/dp_Total = dQ/dp_subs - _(dQ/dI).For a Giffen good,dQ/dp_Total is positive,which implies that - _(dQ/dI)must be positive and large enough to offset dQ/dp_subs,which is always negative.For any inferior good,however,
- _(dQ/dI)is positive but not necessarily large enough to make dQ/dp_Total positive.

Use the Slutsky Equation to Show That a Giffen Good