hi, question below?

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If Gollum, whose utility is increasing in gold and cash already holds substantial gold reserves,what happens to his demand for gold if the price of gold rises? Is gold a giffen good to Gollum?

2006-10-18 04:47:20 · 1 answers · asked by Matt N 1 in Social Science ➔ Economics

1 answers

If gold is perceived by Gollum as abundant, I don't see how it can be a Giffen good.

There is an interesting, if slow-moving, discussion of Giffen at:

http://web.uvic.ca/padm/faculty/pineau/544_oncampus/Ng_final544.doc

2006-10-20 07:26:36 · answer #1 · answered by MBK 7 · 0⤊ 0⤋