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Clara consumes two goods x and y. Suppose her utility function is given as
U(x,y)=min (x, 2y)
The prices of the two goods are Px for good x and Py for good y. If her monthly income is $M,
(a) Derive her uncompensated demand function for good x
(b) Derive her uncompensated demand function for good y
(c) Derive the cross price effects and show that the two goods are complementary goods.
if the government wanted to use a food tax in order to significantly reduce the quantity of sweet and sugary drinks we consume, this could be accomploshed with a relatively small food tax on these drinks if: demand was elastic, demand was inelast..
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