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Blackbeard's demand functions for grog, x;, and bread, x5, are (if his income and the goods' prices are such that he buys positive quantities of
Blackbeard's demand functions for grog, x;, and bread, x5, are (if his income and the goods' prices are such that he buys positive quantities of both goods): (Aside: As an exercise, you can show that these are indeed the demand functions if Blackbeard's utility function is: U(.'El.,l'g) = ({Bl - 1)(182 + 1)) Given Blackbeard's demand functions, which of the following statements are correct? (Note: Multiple answers may be correct.) (] If the price of bread, p,, rises high enough (and nothing else changes), Blackbeard will stop buying bread, z2, completely. (] If the price of grog, p;, rises high enough (and nothing else changes), Blackbeard will stop buying grog, x;, completely. (] If the price of grog, p;, rises high enough (and nothing else changes), Blackbeard will stop buying bread, x5, completely. (] If the price of bread, p;, rises high enough (and nothing else changes), Blackbeard will stop buying grog, x;, completely
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