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In: Economics

Suppose your utility function is U(x,y)=2ln⁡(x)+4y. a) Solve for the individual demand for good x and...

Suppose your utility function is U(x,y)=2ln⁡(x)+4y.

a) Solve for the individual demand for good x and the individual demand for good y.

b) Given Px = 1, Py = 2, and M = 5, find the income elasticity of demand for good x -- is good x normal or inferior (or neither)? Also find the income elasticity of demand for good y -- is good y normal or inferior (or neither)?

c) Given Px = 1, Py = 2, and M =5. Find the elasticity of demand (own-price elasticity) for good x -- is good x ordinary or Giffen?

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