4. Demand function Wealth effects Engel function: given price p, function over wealth x(, w) Wealth expansion path En={x(p,v):>0} Wealth effects Cx,(p,w) ax2(p, w) X(p, w) ax, (p, w) lecture for Chu Kechen Honors Collegelecture4 for Chu Kechen Honors College 4.Demand function ➢ Wealth effects: ⚫ Engel function: given price ,function over wealth ⚫ Wealth expansion path: ⚫ Wealth effects: p x p( , ) w E w w =  { ( , ) : 0} p x p 1 2 ( , ) ( , ) ( , ) ( , ) n x w w x w w w x w w D w             =         p p p x p