Long Form Questions 1. (25 Points) Lauren's utility function is U(X, Y) = x+12Y1/3 a. (10 points) Derive her demand functions for goods x and y. b. (5 points) Will Lauren ever choose a corner solution? If so, what would have to be true of Px? c. (5 points) Assume an interior solution and graph Lauren's income consumption curve. d. (5 points) Assume an interior solution and graph Lauren's price consumption curve, as the price of good x changes.
Long Form Questions 1. (25 Points) Lauren's utility function is U(X, Y) = x+12Y1/3 a. (10 points) Derive her demand functions for goods x and y. b. (5 points) Will Lauren ever choose a corner solution? If so, what would have to be true of Px? c. (5 points) Assume an interior solution and graph Lauren's income consumption curve. d. (5 points) Assume an interior solution and graph Lauren's price consumption curve, as the price of good x changes.
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
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Transcribed Image Text:Long Form Questions
1. (25 Points) Lauren's utility function is U(X, Y) = x+12Y1/3
a. (10 points) Derive her demand functions for goods x and y.
b. (5 points) Will Lauren ever choose a corner solution? If so, what would have to be true of Px?
c. (5 points) Assume an interior solution and graph Lauren's income consumption curve.
d. (5 points) Assume an interior solution and graph Lauren's price consumption curve, as the
price of good x changes.
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