Suppose david faces a new utility such as U(X, Y)=25x0.2 Y0.75 for consuming commodity X and Y, redo question b and c. Derive the demand function for good X and Y What combination of X and Y maximizes the consumer at I=100,px=4,and py=5
Suppose david faces a new utility such as U(X, Y)=25x0.2 Y0.75 for consuming commodity X and Y, redo question b and c. Derive the demand function for good X and Y What combination of X and Y maximizes the consumer at I=100,px=4,and py=5
Chapter5: Income And Substitution Effects
Section: Chapter Questions
Problem 5.1P
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David's utility function for good X and Y is given by U (X,Y) =X2y3. Where px,py and I are the price of good X, price of good Y and consumer income respectively.
E). Suppose david faces a new utility such as U(X, Y)=25x0.2 Y0.75 for consuming commodity X and Y, redo question b and c.
- Derive the demand function for good X and Y
- What combination of X and Y maximizes the consumer at I=100,px=4,and py=5
F). Suppose david faces another new utility function such as U (X, Y) =15xy2 for consuming commodity X and Y,redo question b and c
- Derive the demand function for good X and Y
- What combination of X and Y maximizes the consumer at I=100,px=4,and py=5
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