Derive the income elasticity of demand for individuals

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Reference no: EM132351022

Derive the income elasticity of demand for individuals with

(a) Cobb-Douglas(U(q1, q2 ) = q1αq2(1-α),)

(b) Perfect substitutes(U(q1, q2) =aq1 + bq2, for a, b >0),

(c) Perfect complements utility functions. (U(q1, q2) = min{aq1, bq2}, for a, b>0 ) (Hint: try to find demand function for each utility function first, and then derive income elasticity)

Reference no: EM132351022

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