exercise 1

Exercise 1. a) For the following utility functions. find the value of the optimal choice x* as a function of the parameter a when px =1, pl, =1 and M =10. U(x.y) = xay V(x,y) = min[ax, y] b) Then, for generic px. pv and M write the expression of the consumer's Marshallian demand x*(p. M). (Hint: you will have two Marshallian demand functions. one for good X and one for good Y.)