1. Steve's utility is U B0.5+ Co.5, where B refers to burgers per week and C refers to pieces of cake per week. Assuming Steve has income I, and the price of a burger is PB and the price of a cake is Pe. b. Compute the income elasticity for burgers and cakes. Represent your answers in the most simplest form.

1. Steve's utility is U B0.5+ Co.5, where B refers to burgers per week and C refers to pieces of cake per week. Assuming Steve has income I, and the price of a burger is PB and the price of a cake is Pe. b. Compute the income elasticity for burgers and cakes. Represent your answers in the most simplest form.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

1. Steve's utility is U = B0.5 + Co.5, where B refers to burgers per week and C refers to
pieces of cake per week. Assuming Steve has income I, and the price of a burger is PB and
the price of a cake is Pe.
b. Compute the income elasticity for burgers and cakes. Represent your answers in the
most simplest form.

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