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In an economy, There are 600 consumers of type a, with utility function: U A (x 1 ,x 2 ) = 0.5log(x 1 ) +
In an economy,
There are 600 consumers of type a, with utility function: UA(x1,x2) = 0.5log(x1) + 0.5log(x2)
Each type a consumer has income mA.
There are 300 consumers of Type B, with utility function: UB(x1,x2) = 1/3log(x1) + 2/3log(x2)
Each Type B consumer has income mB.
The prices of the two goods are p1,p2 > 0
Part A) Find the market demand curve, denoted by X1(p1, mA, mB)
Part B) Does the distribution of income does/does not affect the market demand in this economy? If not, show a counterexample.
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