Conclude the change in demand when px increases

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Reference no: EM1322723

Q. 2. Tom has $1000/wk of income to spend on 2 goods.

U(X,Y) = 10X + 8Y

a. Derive the demand schedules for X also Y.

b. Conclude the values for X also Y that maximize utility when PX = 40 also PY = 50.

c. Conclude the change in demand when PX increases to 80.

d. Conclude the exact amounts of the income also substitution effects for X.

e. Repeat 2.a-d when the utility function is defined as U = min(10X, 5Y)

Reference no: EM1322723

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