In two commodities world, utility function for a consumer and her income are given respectively. 1 1 U= x2y2 I -480 If the price of these goods are P.= 15 and Py 60 what would be her demand for these two goods *=? and y =? If the price of first good R has increased from 15 to 60. To keep her utility fixed how much does she need to spend for these two goods at least. In other words what should be her minimum income.

In two commodities world, utility function for a consumer and her income are given respectively. 1 1 U= x2y2 I -480 If the price of these goods are P.= 15 and Py 60 what would be her demand for these two goods *=? and y =? If the price of first good R has increased from 15 to 60. To keep her utility fixed how much does she need to spend for these two goods at least. In other words what should be her minimum income.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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