7. Let u(x₁, x₂) = 0.31n (x₁) + 0.7ln (x₂). These represent preferences that are smooth and convex. The demand for this consumer must be in the interior. Find the demand for this consumer when the budget is m and the prices of Good 1 and Good 2 are p₁ and på respectively. What happens to demand of Good 1 when p₁ is doubled (becomes 2p₁)?

7. Let u(x₁, x₂) = 0.31n (x₁) + 0.7ln (x₂). These represent preferences that are smooth and convex. The demand for this consumer must be in the interior. Find the demand for this consumer when the budget is m and the prices of Good 1 and Good 2 are p₁ and på respectively. What happens to demand of Good 1 when p₁ is doubled (becomes 2p₁)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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