4. Suppose Adam has the utility function u(x, y) = x²y, for which MUx(x, y) = (x, y) = 2xy du and MU, (x, y) = (x, y) = x². a. If his income is 90 and the prices of x and y are 12 and 5, respectively, how much of each good would he demand? b. Rather than solve for specific quantities at specific income and prices, find the general solution, i.e., his demands for x and y as functions of I, px, and py. That is, go through the same steps as in part (a) using the letters I, px, and py instead of 90, 12 and 5.

4. Suppose Adam has the utility function u(x, y) = x²y, for which MUx(x, y) = (x, y) = 2xy du and MU, (x, y) = (x, y) = x². a. If his income is 90 and the prices of x and y are 12 and 5, respectively, how much of each good would he demand? b. Rather than solve for specific quantities at specific income and prices, find the general solution, i.e., his demands for x and y as functions of I, px, and py. That is, go through the same steps as in part (a) using the letters I, px, and py instead of 90, 12 and 5.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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