Philip 's quasilinear utility function is U 4q 1 0 5 q 2 His budget for these goods is Y 10 Originally, the prices are p 1 p 2 1 However, the price of the first good rises to p 1 2 Discuss the substitution, income, and total effect on the demand for q 1 ...

Philips Lagrangian is L 4q 1 05 q 2 Y p 1 q 1 q 2 The first order conditions are L 1 2q 1 05 ...

Philip's quasilinear utility function is U = 4q 1 0.5 + q 2 . His budget for

Question:

Philip's quasilinear utility function is U = 4q₁^0.5 + q₂. His budget for these goods is Y = 10. Originally, the prices are p₁ = p₂ = 1. However, the price of the first good rises to p₁ = 2. Discuss the substitution, income, and total effect on the demand for q₁?