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1. Consider a consumer with the following utility function and budget line, respectively: U(X,Y) = 0.3log(X) + 0.7log(Y) Px * X+Py * Y =
1. Consider a consumer with the following utility function and budget line, respectively: U(X,Y) = 0.3log(X) + 0.7log(Y) Px * X+Py * Y = I, where Px and Py are the prices of X and Y, respectively, and I is the consumer's income. (a) Derive the demand functions for X and Y. (b) Are X and Y normal or inferior goods? Explain. (c) Do both demand functions downward sloping? Explain.
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Behavioral Finance Psychology Decision-Making and Markets
Authors: Lucy Ackert
1st edition
324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170
