Consider a consumer with the following utility function U (x, y) = x + ln y. a) Compute the individual demand functions.
Posted: Mon Mar 21, 2022 4:29 pm
Consider a consumer with the following utility function U (x, y)
= x + ln y.
a) Compute the individual demand functions.
b) Assume that the prices were initially px = 1, py = 1, I
= 10 and they have been changed to px = 2, py = 1, I = 10. Compute
the exact amount of the total, substitution and income effects on
the consumption of good x.
= x + ln y.
a) Compute the individual demand functions.
b) Assume that the prices were initially px = 1, py = 1, I
= 10 and they have been changed to px = 2, py = 1, I = 10. Compute
the exact amount of the total, substitution and income effects on
the consumption of good x.