What are the josephs demands for roses also tulips

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Reference no: EM1320554

Q. Microeconomic Theory

Joseph likes roses (R) also tulips (T) equally also views them as perfect substitutes in proportion 1 to 1. The price of a rose is $4, the price of a tulip is $8 also Joseph has $40 to spend on lowers.

a) Elucidate how much of each flower will Joseph buys? The 1st order conditions will not help; think about Illustrate what you would do in this situation.

b) Now, Assume that the price of a rose rises to $10. Elucidate how does the consumption of Joseph change?

c) Illustrate what are the Joseph's demands for roses also tulips as a function of prices also income {PR, PT, I}? You will have three cases depending on the relationship between PR also PT.

Reference no: EM1320554

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