1.Assume the utility function of a consumer for goods X and Y is given by U(X, y) = XY + Y. If the consumer has income M, and the prices of X and Y are P_x and P_y respectively.

a.Derive the uncompensated (marshalliana) demand function of X^* and Y^*.

b.Imagine P_x = 10, P_y = 5 and M = 100, determine X^* and Y^*

c.Suppose there are changes in the prices and income of the consumer to P_x =5, P_y = 10 and M = 150, determine whether X and Y are normal or inferior goods and whether they are substitute or complement.