Unformatted text preview: 2) Laura’s 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) John’s utility function is U (X,Y) = min{βX,ρ 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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 Fall '08
 cunningham
 Economics, Supply And Demand, marshallian demand functions, Professor Mazzocco

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