1. WAand demand law Slutsky matrix(substitution matrix) S(p, w)=(S(p, w) Substitution effects (p,w) (p, w)x(p, w) S(p, w)is n.s. d Giffen good is necessary inferior good ax, (p, w) ax, (p, w) x(p,)≤01.WA and demand law • Slutsky matrix (substitution matrix) • Substitution effects • is n.s.d • Giffen good is necessary inferior good. ( , ) ( ( , )) lk n n S w s w p p =  ( , ) ( , ) ( , ) ( , ) l l lk k k x w x w s w x w p w   = +   p p p p S w ( , ) p ( , ) ( , ) ( , ) ( , ) 0 l l ll l l x w x w s w x w p w   = +    p p p p