A consumer’s preferences for X and Y are described by the utility function: U = X2/3Y1/3. Price of X
Question: A consumer’s preferences for X and Y are described by the utility function: U = X2/3Y1/3.
Price of X $8 and price of Y is $3, and her income is $150.
a) What is the equation for her income expansion path?
What is the equation for her Engel curve for X?
b) How will her budget share spent on X change if her income changes?
What is her income elasticity of demand for X? And the same for Y?
How does the budget share spent on Y change as income changes?
c) What is the equation for her demand curve for X?
How does her demand curve for X shift when the price of Y rises?
Price: $2.99
Solution: The solution consists of 2 pages
Solution Format: Word Document
Solution Format: Word Document
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