Question

# For each of the following utility functions, graphically show the following:

(i) the Slutsky substitution

and income effects when p1 decreases.

(ii) the Hicks substitution and income effects when p1 decreases.

(iii) the Marshallian and Hicksian demand curves for good 1:

(a) perfect complements: U(x1, x2) = min(4x1, 5x2)

(b) quasi-linear: U(x1, x2) = x1^(2/3)+x2

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