Explain are the products substitutes or complements

Assignment Help Econometrics

Reference no: EM13239140

Assume a comsumer with the utility function

U = U(x,y) = (X + 2)(Y + 1)

and the budget constraint

M = PxX + PyY

a. Set up the constrained maximization problem, and derive the firsr-order conditons.

b. Derive the demand for X and Y.

c. Derive the price elasticites of demand. Do the demands obey the law of demand?

d. Are the products substitutes or complements?

Reference no: EM13239140

Questions Cloud

What is economically efficient to move production : Ross Perot added his memorable "insight" to the debate over the North American Free Trade Agreement (NAFTA) when he warned that passage of NAFTA would create a "giant sucking sound" as U. S. employers shipped jobs to Mexico

Explain equilibrium is seen to shift toward the products : A chemical reaction at equilibrium is heated, briefly, by holding it over a flame. The equilibrium is seen to shift toward the products. What can be said about the enthalpy and entropy of the reaction

Determine the total time : A coin is tossed upward with an initial speed of 7.5 m/s2, What is the total time it is in the air before returning yo it's releasing point

Describe how many grams of product can be isolated : If you electrolyze 150. g CH3SO2F, how many grams of HF are required and how many grams of each product can be isolated

Explain are the products substitutes or complements : a. Set up the constrained maximization problem, and derive the firsr-order conditons. b. Derive the demand for X and Y. c. Derive the price elasticites of demand. Do the demands obey the law of demand

The mistake of forgetting the explicitly exit condition : When trying recursion for the first time, most new programmers make the mistake of forgetting the explicitly exit condition.

How tall is the building that the child is standing on : You are walking around your neighborhood and you see a child on top of a roof of a building kick a soccer ball, How tall is the building that the child is standing on

Compute confidence intervals for unknown population mean : In a study of the income of U.S factory workers, a random sample of 125 workers shows a sample mean of $29,000. Assume that the population standard deviation is $4,500.

Estimate the temperature where g equal to 0 for the reaction : Estimate the temperature where ?G=0 for the following reaction: (giving ?H= -176 kJ, and ?S= -284.5 J/K) CAUTION Beware of units. NH3(g)+HCl(g)--->NH4Cl(s)

User Account

All Pages