Suppose that Sam has a utility function u(x, y)= xy2 where x is the amount of good 1 and y is the amount of good 2. The price of good 1 is $10 and price of good 2 is $20, and the income is $ 90. The price of good 1 is denoted by px and the income is donated by m. Derive the equations for income-offer curve, Engel curve for good 1, demand curve for good 1 and solve for the optimal consumption of (x, y).

Suppose that Sam has a utility function u(x, y)= xy2 where x is the amount of good 1 and y is the amount of good 2. The price of good 1 is $10 and price of good 2 is $20, and the income is $ 90. The price of good 1 is denoted by px and the income is donated by m. Derive the equations for income-offer curve, Engel curve for good 1, demand curve for good 1 and solve for the optimal consumption of (x, y).

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 25SQ

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