a) A consumer has a utility function given by U = x0.25 y0.75 He has an income of £100, the price of good x is £5 and the price of good y is £10. How much of the 2 goods x and y does the consumer buy? Take a picture of your workings and upload with your answer, or type out your workings. b) For the utility function above, what is the cross-price elasticity of demand for good x with respect to the price of good y? Take a picture of your workings and upload with your answer, or type out your workings. c) For the utility function above, what is the elasticity of demand of good x with respect to its own price? Take a picture of your workings and upload with your answer, or type out your workings.

a) A consumer has a utility function given by U = x0.25 y0.75 He has an income of £100, the price of good x is £5 and the price of good y is £10. How much of the 2 goods x and y does the consumer buy? Take a picture of your workings and upload with your answer, or type out your workings. b) For the utility function above, what is the cross-price elasticity of demand for good x with respect to the price of good y? Take a picture of your workings and upload with your answer, or type out your workings. c) For the utility function above, what is the elasticity of demand of good x with respect to its own price? Take a picture of your workings and upload with your answer, or type out your workings.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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