Question
suppose an individual's utility function is U(x,y) = sqrt(x) + 2 * sqrt(y) and her total budget is $90. the price of y is always
suppose an individual's utility function is U(x,y) = sqrt(x) + 2 * sqrt(y) and her total budget is $90. the price of y is always $1 but the price of x drops from $1 to 50 cents. calculate the effect on x and the income effect on y.
answer choices:
a. SE = +32X; IE = +10Y
b. SE = +32X; IE = -22Y
c. SE = +18X; IE = -22Y
d. SE = +18X; IE = +10Y
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The Commanding Heights The Battle For The World Economy
Authors: Daniel Yergin, Joseph Stanislaw
1st Edition
068483569X, 9780684835693
