This is macroeconomics theory Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by:U(X1, X2) = x₁4xa) What is the consumer's demand for x, as a function of income and prices? What is the consumer'sdemand for x₂ as a function of income and prices? Use Lagrange method or your intuition.b) What percentage of income does the consumer spend on x₁? What percentage of income does theconsumer spend on x₂?Page 3

The consumer maximizes the utility subject to the budget constraint. Demand function represents…

Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by: U(x₁, x₂) = x₁4x 06 a) What is the consumer's demand for x, as a function of income and prices? What is the consumer's demand for x, as a function of income and prices? Use Lagrange method or your intuition. b) What percentage of income does the consumer spend on x₁? What percentage of income does the consumer spend on x₂?

Questions 4 (Choice & Demand). Suppose a consumer's utility function is given by: U(x₁, x₂) = x₁4x 06 a) What is the consumer's demand for x, as a function of income and prices? What is the consumer's demand for x, as a function of income and prices? Use Lagrange method or your intuition. b) What percentage of income does the consumer spend on x₁? What percentage of income does the consumer spend on x₂?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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This is macroeconomics theory

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

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