Show full answers to part d) e) f) Exercise 3Maria is a consumer with preferences over good x and good y representedby the utility function u(x, y) = x²y. The price of good y in this market is Py = $2.a) Derive Maria's demand functions of good x and good y. [Hint: Solve the UMP keepingPx and I undefined and using py = $2]b) Draw her demand curve of good x assuming she has an income of I = $240.c) On a separate graph, draw her Engel curve for good y. Is good y a normal good forMaria? Explain.Jim is another consumer buying on the same market as Maria. His preferences over the two goodsare represented by u(x, y) = xy. Since he is on the same market, he is facing the same prices asMaria does.d) Derive Jim's demand functions of good x and good y. [Hint: Solve the UMP keeping Pxand I undefined and using py = $2]e) Draw his demand curve of good x assuming he has the same income than Maria, I =$240. Use the same price levels you used for plotting Maria's demand curve in part (b).f) Derive the aggregate market demand function of good x when Maria and Jim are theonly two consumers on the market. Next, on a separate graph, draw the market demandcurve of good x.

d) Derive Jim's demand functions of good x and good y. [Hint: Solve the UMP keeping Px and I undefined and using py = $2] e) Draw his demand curve of good x assuming he has the same income than Maria, I = $240. Use the same price levels you used for plotting Maria's demand curve in part (b). f) Derive the aggregate market demand function of good x when Maria and Jim are the only two consumers on the market. Next, on a separate graph, draw the market demand curve of good x.

d) Derive Jim's demand functions of good x and good y. [Hint: Solve the UMP keeping Px and I undefined and using py = $2] e) Draw his demand curve of good x assuming he has the same income than Maria, I = $240. Use the same price levels you used for plotting Maria's demand curve in part (b). f) Derive the aggregate market demand function of good x when Maria and Jim are the only two consumers on the market. Next, on a separate graph, draw the market demand curve of good x.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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