Consider an individual making choices over two goods, x and y with initial prices px= 2...

Consider an individual making choices over two goods, x and y with initial prices px= 2 and py= 1, with income I= 100: (a) If an individual has the utility function u(x;y) = 3x+y. what would the total, income and substitution effects of a price of x increase to 5? Show your work (b) If an individual has the utility function u(x;y) =x^2+y^2; what would the total, income and substitution effects of a price of x decrease to 0:50? Show your work

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Rahul Sunny answered 2 weeks ago

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