Jack has a utility function u(x,y) = xy, and an endowment of (2,4). He has no...

Jack has a utility function u(x,y) = xy, and an endowment of (2,4). He has no other income.

(a) Calculate the demands when the prices are p_x = 2, p_y = 4.

(b) What are the net demands for the prices from (a)?

(c) Let the prices be variables. Calculate the demands as functions of the prices.

(d) Now let the prices and the endowments be variables. Calculate the demands as

functions of the endowments and the prices.

Expert Solution

Rahul Sunny answered 2 years ago

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