Question
Pro Gary and Maja are the only people in town who drink cashew milk (c). The other good they both consume is avocado (a). Gary's
Pro Gary and Maja are the only people in town who drink cashew milk (c). The other good they both consume is avocado (a). Gary's utility function is UGary = 3ca, so his marginal utility functions are MUc = 3a and MUa = 3c. Maja's utility function is UMaja = 3c + 24a, so her marginal utility functions are MUc = 3 and MUa = 12/a . They each have $200 to spend. (a) On separate graphs, plot Maja and Gary's demand curves for cashew milk, assuming the price of avocados is constant at $2. (b) Find the equation for the aggregate demand curve for cashew milk and plot it, keeping the price of avocados constant at $2.
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