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4. Suppose prices are pr = 2 and Py= u(x, y) = x+y: (i) Calculate the optimal demands r* and y*. 1. For the
4. Suppose prices are pr = 2 and Py= u(x, y) = x+y: (i) Calculate the optimal demands r* and y*. 1. For the utility function (ii) In which range of wealth does the individual only want to consume y, i.e. x* = 0? In which range of wealth does he consume more x than y, i.e. x*y*? Are x and y normal goods? (Qualify your answer as needed.)
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