Question
Consider a consumer with simple Cobb-Douglas preferences over two goods represented by [u(x,y) = xy]. The prices of the two goods are initially both $1,
Consider a consumer with simple Cobb-Douglas preferences over two goods represented by [u(x,y) = xy]. The prices of the two goods are initially both $1, and her income is $100.
-If the price of good x increases to $2, what is the impact on her demand for good x; how about good y?
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Historical Perspectives On The American Economy Selected Readings
Authors: Robert Whaples, Dianne C Betts
1st Edition
0521466482, 9780521466486
