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2. Han is choosing between lightsabers (L) and blasters (B). His utility function is U(L,B)=LB+B. Denote his income as I, and the prices of lightsabers
2. Han is choosing between lightsabers (L) and blasters (B). His utility function is U(L,B)=LB+B. Denote his income as I, and the prices of lightsabers and blasters as PL and PB, respectively. (a) Use any method to solve for Han's optimal levels of consumption for lightsabers, and blasters. (Hint: Look for the general demand functions L(1, PL, PB) and B(1, PL, PB).) (b) Suppose 1=11, and PL=PB=1. How many lightsabers and blasters does Han buy? Show your work. (c) Derive the income elasticity of demand for blasters, and state whether blasters are inferior, income inelastic, or normal goods for Han (list all that apply, and explain, for full credit). (Hint: use calculus.) (d) Derive the cross-price elasticity of demand for blasters, and state whether blasters are complements, cross-price inelastic, or substitutes (list all that apply, and explain, for full credit). (e) Derive the cross-price elasticity of demand for lightsabers, and state whether lightsabers are complements, cross-price inelastic, or substitutes (list all that apply, and explain, for full credit). Do you see anything surprising about the answers to parts (d) and (e), taken together
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