Question
6.) Given the following information: utility function U(x,y)=4X 0.5 Y 0.5 , price of good X is N$5, the price of good Y is N$10
6.) Given the following information: utility function U(x,y)=4X0.5 Y0.5, price of good X is N$5, the price of good Y is N$10 and the consumer income N$400.
What is the level of utility when the price of good X is N$2.5 and the price of good Y is N$10,00.
7.) Given the following information: utility function U(x,y)=4X0.5 Y0.5, price of good X is N$5, the price of good Y is N$10 and the consumer income N$400.
What is the change in quantity demanded of good X which is associated with the substitution effect when the price of good X decreases from N$5 to N$2.5?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started