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. (10 points) (Endowment Economy) There is a consumer who has the endowments of (w;, ws) = (1,5). The market prices for both goods are
. (10 points) (Endowment Economy) There is a consumer who has the endowments of (w;, ws) = (1,5). The market prices for both goods are p; = 1 and p; = 2. The consumer has the utility 1/3 2/3 function of u(xy,xs) = x," z;'\" Now, suppose there is a price change for good 1, and the new price is p} = 3. (a) Calculate the substitution effect of the price change on good 1. (b) Calculate the ordinary income effect of the price change on good 1. (c) Calculate the endowment income effect of the price change on good 1
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