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For the below questions, consider a consumer that consumes two goods, x and z with the following utility function. U = x0.750.25 Suppose initial values
For the below questions, consider a consumer that consumes two goods, x and z with the following utility function. U = x0.750.25 Suppose initial values for income and the prices of goods x and z are y = 100, Px # 5, and Pz - 15 respectively, then the price of good x increases to Px - 10 . What is the magnitude of the Total Effect? O TE = 9 O TE = 7.5 O TE = -7.5 O TE = -9 Question 4 10 pts Calculate the substitution effect, income effect, and total effect using your answers from Problem 3 (Round to three decimal places as needed. Hint: find the decomposition bundle first). Upload a photo or scan of your answer. To receive full credit, you must show your work
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