a) Choose X, and X, to max the utility fxn, U(X,X)=chX;+Q-a)h.X, st: M = P, X, + P,X; a) Consider a price decrease for good 1 from P toP . Write down the Demand functions for good 1 when prices are P, and when prices drop from R toP" b) Obtain the SE and IE associated with the price change

a) Choose X, and X, to max the utility fxn, U(X,X)=chX;+Q-a)h.X, st: M = P, X, + P,X; a) Consider a price decrease for good 1 from P toP . Write down the Demand functions for good 1 when prices are P, and when prices drop from R toP" b) Obtain the SE and IE associated with the price change

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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10:55 Sun 8 Aug
30%
Screenshot_20210808-073803_Office.jpg
a) Choose X, and X, to max the utility fxn, UX,X)=chX;+(l-a)hX,
st: M = P, X, + P¿X ;
a) Consider a price decrease for good 1 from P toP" . Write down the
Demand functions for good 1 when prices are P, and when prices drop
from R toP"
b) Obtain the SE and IE associated with the price change

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