Income and substitution effects/Slutsky decomposition (20/100) 2. Let Jarot's utility function be U(x, y) = x + Vy. He's

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Income And Substitution Effects Slutsky Decomposition 20 100 2 Let Jarot S Utility Function Be U X Y X Vy He S 1 (60.97 KiB) Viewed 30 times

Income and substitution effects/Slutsky decomposition (20/100) 2. Let Jarot's utility function be U(x, y) = x + Vy. He's facing a budget constraint of Pxx + Pyy si a. Sketch his budget line and indifference curve with a point showing optimal consumption allocation b. Using the Lagrangian, solve for the Marshallian demand functions for both C. Using Shephard's lemma, solve for the Hicksian demand function for good x d. Write down the Slutsky equations for good x and for good y and comment on the difference between the two.