2- James’ Marshallian demand function solves the utility maximization problem that is maxU = x1 + x2. The price of good 1 is $1 and price of good 2 is $2, and income is $400. Suppose that price 1 increases to p1’ = 3. Determine the substitution effect, income effect and total effect. Draw the graph and explain what type of good is.

## This question was asked on Jan 18, 2013.

### Recently Asked Questions

- Perform the indicated operation and simplify. 14.) (3x^4-3x+3x^3)-(7x^3-5x^4+7) Multiply as indicated and simplify. 15.) (b+7)(7b^2-3b-2) Solve the equation by

- Sarah is a 30-year-old mother of two young children, ages 3 and 5. Her husband was recently disabled in a car accident and has been unable to work for 6

- Simplify. Your answer should contain only positive exponents. 10.) 4yx^5•2x^2y^3 11.) -4x^3y^3/4x^2y^2•2y^0 12.) (4uv^-2)^-3 13-) (2mn^4)^4•2m^-1n^2