Question
Juma's utility function is represented by the equation U(X1X2)=X1 0.6X2 0.4. The budget equation is P, X1 + P, X=Y Pi Is the price
Juma's utility function is represented by the equation U(X1X2)=X1 0.6X2 0.4. The budget equation is P, X1 + P, X=Y Pi Is the price of good X1 P, is the price of good X, and Y represents the income a) Work out the demand functions for this consumer. (9 marks) b) Derive marginal utility for each commodity. (3 marks) c) What is the ratio of the prices of these goods? (3 marks)
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
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