Are they homogeneous in income and prices

Reference no: EM13686983

Presume David spends his income (I) on two goods, x and y, whose market prices are px and py, respectively. His preferences are represented by the utility function u(x;y) = lnx + 2lny (MUx = 1=x;MUy = 2=y).

1. Derive his demand functions for x and y. Are they homogeneous in income and prices?

2. Assuming I = $60 and px = $1, graph his demand curve for y.

3. Repeat part (b) for the case in which px = $2.

Reference no: EM13686983

Questions Cloud

Why did the gold standard collapse : Why did the gold standard collapse? Is there a case for returning to some kind of gold standard? If so, what is it? What opportunities might current IMF lending policies to developing nations create for international business? What threats might they..

Compute the total overhead and period cost allocation : Compute the cost of each product under the simple/traditional costing method. For period costs, use the same basis of allocation as factory overhead and compute the net operating profit margin of each product using the simple/traditional costing me..

How much current must run through the wire : A student attempts to "levitate" a piece of current-carrying wire using the Earth's magnetic field (55 T). How much current must run through the wire so that the magnetic force balances the weight of the wire

Calculate how much current is required to make the field : Calculate how much current is required to make the field at the center of a current loop comparable to the magnetic field near one of the poles of a permanent magnet

Are they homogeneous in income and prices : Presume David spends his income (I) on two goods, x and y, whose market prices are px and py, respectively. His preferences are represented by the utility function u(x;y) = lnx + 2lny (MUx = 1=x;MUy = 2=y).

Evaluate what is the net force on the roof : If wind blows at 44 m/s over a house, what is the net force on the roof if its area is 190 m2 and is flat

Decide the optimal price and quantity for the firm : Veronica Martz has determined that demand for her Derby lunches is given by Q= 150-0.4P and a cost equation given by C= 80+5Q. Decide the optimal price and quantity for the firm. (Price should be calculated to nearest cent. Example: $ 5.43 must not b..

Can she rely on the business judgment rule in this situation : She arranges with the company's bank to transfer an amount of $65,000 from the company account into a personal bank account held by her in her own name. She uses the funds to finalise some outstanding personal debts.

What is the resistance of this new cable : A metal wire of resistance R is cut into five equal pieces that are then placed together side by side to form a new cable with a length equal to one-fifth the original length. What is the resistance of this new cable

User Account

All Pages