1. Suppose David spends his income (I) on two goods, x and y, whose market prices are px and py, respectively. His preferences are represented by the utility function u(x,y)= 2ln x+ lny (MUx=2/x, MUy=1/y).

a. Derive his demand functions for x and y.

b. Assuming px = $1 and py = $2, graph his Engel curve for x.

c. Assuming I = $60 and px = $1, graph his demand curve for y.

d. On the same graph repeat part c for the case in which I = $90.

1. Suppose David spends his income (1) on two goods, x and y, whose market prices are px and py, respectively. His preferences are represented by the utility function u(x, y) = 21nx + In y (MUx=2/x, MUy=1/y). a. Derive his demand functions for x and y. b. Assuming px = $1 and py = $2, graph his Engel curve for x. c. Assuming I = $60 and px = $1, graph his demand curve for y. d. On the same graph repeat part c for the case in which I = $90