19:32 Fri 6 Aug91%Screenshot_20210806-193021_Office.jpga) Choose X, and X, to max the utility fxn, UX,„X,)=chX;+(l-a}hX;st: M - P, X + P,X ;a) Write down the demand functions for goods 1 and 2b) Consider a price decrease for good 1 from P, toP" . Write down thedemand functions for good 1 when prices are P, and when prices dropfrom R toPc) What is the compensating income, M associated with the pricechange?Obtain the SE and IE associated with the price change24

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a) Choose X, and X, to max the utility fxn, '(X,X)=chX,+Q-Q}hX, st: M - P, X, + P,X; a) Write down the demand functions for goods 1 and 2 b) Consider a price decrease for good 1 from R toP" . Write down the demand functions for good 1 when prices are R and when prices drop from R toP" c) What is the compensating income, M´ associated with the price change? Obtain the SE and IE associated with the price change

a) Choose X, and X, to max the utility fxn, '(X,X)=chX,+Q-Q}hX, st: M - P, X, + P,X; a) Write down the demand functions for goods 1 and 2 b) Consider a price decrease for good 1 from R toP" . Write down the demand functions for good 1 when prices are R and when prices drop from R toP" c) What is the compensating income, M´ associated with the price change? 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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