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Derive the demand function for good 2

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Consumer's utility is U=5x1+7x2. Price of good 1 is fixed at 10, income is I

  1. Derive the demand function for good 2.
  2. Consumer's utility is min(2x1,x2). Utility is U, prices are p1 and p2. What is the bundle that minimizes this consumer's expenditure?
  3. A consumer purchases two goods: x1 and x2. The Engel curve for x1 is a straight line from the origin with slope 6, the Engel curve for x2 is a straight line from the origin with slope 12. The price of good 1 is 4. What is the price of good 2?
  4. Take a consumer whose income is 32 and the utility function is x1+2(square root of x2). The price of good 2 is fixed at 4. The price of good 1 decreases from 8 to 4. What are the income and substitution effects of this price change?
  5. Consumer's utility is 3 (square root of x1) + 2(square root of x2). Derive the Hicksian demand for good 2 corresponding to utility level U.

Reference no: EM132813253

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