Question
Consider the following utility function: u(x, y) = x^1/2 + y^1/2 (a) Derive the optimal utility maximizing demands for x as a function of prices
Consider the following utility function: u(x, y) = x^1/2 + y^1/2
(a) Derive the optimal utility maximizing demands for x as a function of prices and income.
(b) Find the formula for price elasticity of demand for x.
(c) Find the formula for the income elasticity of demand for x.
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Behavioral Finance Psychology Decision-Making and Markets
Authors: Lucy Ackert
1st edition
324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170
