5.1 Thirsty Ed drinks only pure spring water, but he can purchase it in two different-sized containers: 0.75 liter and 2 liter. Because the water itself is identical, he regards these two "goods" as perfect substitutes. b. State Ed's demand function for x in terms of P Py, and I. c. Graph the demand curve for x, holding I and p, constant. d. How do changes in I and p, shift the demand curve for x? e. What would the compensated demand curve for x look like in this situation? a. Assuming Ed's utility depends only on the quantity of water consumed and that the containers themselves yield no utility, express this utility function in terms of quantities of 0.75-liter containers (x) and 2-liter containers (y).

5.1 Thirsty Ed drinks only pure spring water, but he can purchase it in two different-sized containers: 0.75 liter and 2 liter. Because the water itself is identical, he regards these two "goods" as perfect substitutes. b. State Ed's demand function for x in terms of P Py, and I. c. Graph the demand curve for x, holding I and p, constant. d. How do changes in I and p, shift the demand curve for x? e. What would the compensated demand curve for x look like in this situation? a. Assuming Ed's utility depends only on the quantity of water consumed and that the containers themselves yield no utility, express this utility function in terms of quantities of 0.75-liter containers (x) and 2-liter containers (y).

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 2QFR

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