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.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 6SQP

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Please answer D
In two commodities world, utility function for a consumer and her income are given respectively. 11 U = x2y2 I= 480 If the price of these goods are Px= 15 and P, = 60 what would be her demand for these two goods * =? and y =? If the price of first good P has increased from 15 to 60. To keep her utility fixed how much does she need to spend for these two goods at least. In other words what should be her minimum income.
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