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Unformatted text preview: 2) Lauras utility function is U(X,Y) = ln(X) + 2Y . Her income is denoted by I and the prices by P X and P Y . In addition, we suppose that I>P y . a) Find the Marshalian (uncompensated) demands for X and Y. b) Using the Marshallian demand functions, calculate the income elasticity of demand for each good. c) Using the Marshallian demand functions, calculate the price elasticity of demand for each good, i.e., e X,PX and e Y,PY . 3) Johns utility function is U (X,Y) = min{X, Y}. His income is denoted by I and the prices by P X and P Y . a) Find the Marshalian (uncompensated) demands for X and Y. b) Show that the income elasticity of demand for X and Y is equal to 1....
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This note was uploaded on 11/09/2011 for the course ECON 11 taught by Professor Cunningham during the Fall '08 term at UCLA.
 Fall '08
 cunningham
 Economics

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