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Henry spends all his income on Games (G) and Shoes (S) . His preferences can be represented by the utility function: U(G, S) = G
Henry spends all his income on Games (G) and Shoes (S). His preferences can be represented by the utility function: U(G, S) = GS .
Find Henry's Marshallian demand Function for Games and for Shoes, G( pG, pS, I ) and S ( pG, pS, I ), in terms of the price of Games ( pS ), the price of Shoes ( pS ), and Henry's income ( I ).
MDF Games: MDF Shoes:
G =I / 2 PG S =I / 2Ps
**Find the equation of the Engel curve for Shoes (G). Illustrate the Engel curve graphically. What is peculiar about the shape of the Engel Curve? **
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