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If the consumer preference on the motorcycle transportation (Go Jek, Grab Bike) =(x1,x2) can be represented as the following utility function: U(x1,x2)=(x1+1)(x2+1) and a consumer
If the consumer preference on the motorcycle transportation (Go Jek, Grab Bike) =(x1,x2) can be represented as the following utility function: U(x1,x2)=(x1+1)(x2+1) and a consumer faces a budget contraint as p1x1+p2x2=W, Where p1 is the price of good-1 and p2 is the price of good-2 while W is income. then answer the following questions! a. Show using example that the indirect utility function is homogenous of degree zero in p and y ! b. The Go Jek's price is P1=10,000; the Grab Bike's price is P2=10,000; and the budget allocation per-month is W=200,000. The competition between Go Jek and Grab Bike is very hard to increase the market share. For winning the competition, Go Jek is launching a campaign of 5,000 for all destinations. Thus, the Go Jek's price decreases from 10,000 to 5,000(p1=10,000p11=5,000), then find the substitution effect and income effect of Go Jek! Use both figure/graph and calculation! If the consumer preference on the motorcycle transportation (Go Jek, Grab Bike) =(x1,x2) can be represented as the following utility function: U(x1,x2)=(x1+1)(x2+1) and a consumer faces a budget contraint as p1x1+p2x2=W, Where p1 is the price of good-1 and p2 is the price of good-2 while W is income. then answer the following questions! a. Show using example that the indirect utility function is homogenous of degree zero in p and y ! b. The Go Jek's price is P1=10,000; the Grab Bike's price is P2=10,000; and the budget allocation per-month is W=200,000. The competition between Go Jek and Grab Bike is very hard to increase the market share. For winning the competition, Go Jek is launching a campaign of 5,000 for all destinations. Thus, the Go Jek's price decreases from 10,000 to 5,000(p1=10,000p11=5,000), then find the substitution effect and income effect of Go Jek! Use both figure/graph and calculation
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