This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: co/ee with 2 oz. of half-and-half. (a) Draw Carols indi/erence curves for co/ee and half-and-half. (b) Find Carols demand for co/ee and half-and-half. (c) How much co/ee and half-and-half will Carol purchase if she has $30 of income, the price of a cup of co/ee is $6 and the price of half-and-half is $2? (d) Suppose that the price of co/ee rises to $11. How will her consump-tion change? (e) How much should Carols income be to compensate for the increase in the price of co/ee? 6. David has the following preferences over the consumption of x and y : U ( x;y ) = ln x + 2 ln y . (a) Find Davids uncompensated demand for x and y and use these to nd his indirect utility function. 1 (b) Use the own-price Slutsky equation for x to determine the substitu-tion e/ect. (c) Find the compensated demand for x and y and use these to &nd the expenditure function E ( p x ;p y ;U ) . 2...
View Full Document
This note was uploaded on 09/23/2008 for the course ECON 11 taught by Professor Cunningham during the Summer '08 term at UCLA.
- Summer '08