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Multiple times thumbs down for wrong answer Suppose a consumer's utility function is given by U(X,Y)=X5Y5. Also, the consumer has $36 to spend. PX=$3 and
Multiple times thumbs down for wrong answer
Suppose a consumer's utility function is given by U(X,Y)=X5Y5. Also, the consumer has $36 to spend. PX=$3 and PY=$4. a) (2 points) How much X and Y should the consumer purchase in order to maximize utility? b) (2 points) Now suppose Pr decreases to $2. What is the new bundle of X and Y that the consumer will demand? c) (4 points) How much money would the consumer need in order to have the same utility level after the price change as before the price change? d) (4 points) How much money would the consumer be willing to pay to guarantee the price decrease? e) (4 points) Of the total change in the quantity demanded of Y, how much is due to the substitution effect and how much is due to the income effect? You do not need to write anything in the white space for this question (but you may wish to (ype your answers), just make sure your answer and work get uploaded to the final "question" in the quizStep by Step Solution
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