5.1 Bottled water can only be purchased in two different-sized containers: 0.75 litres and 2 litres. Assume the water itself is identical, and these two ‘goods’ are perfect substitutes.

a.

If the containers themselves yield no utility, express the utility function in terms of quantities of 0.75-litre containers (x) and 2-litre containers (y).

b.

c.

d.

State the demand function for x in terms of px, py, and I.

Use a graph to illustrate the demand curve for x, holding I and py constant.

How do changes in I and py shift the demand curve for x?