What is income elasticity-own price elasticity for good qt

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Reference no: EM13896590

The given utility function is U= 100 Qt 0.5 Qc 0.5, the individual’s dual problem is to minimize E=Pt Qt +Pc Qc (show all the works and steps)

Where: Pt is the price of tea; P2 is the price of cake; Qt is the amount of tea; Q2 is the amount of cake; E is the total budget.

a. What is the minimum expenditure function?

b. If the Pt = 0.25 and Pc =1 and U= 2, what does the expenditure functions looks like?

c. What is the compensated demand function for Qt?

d. What is income elasticity for good Qt?

e. What is own price elasticity for good Qt?

f. What is the Engel curve?

Reference no: EM13896590

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