Question
In: Economics
Juan has an income of $ 500 and consumes gasoline (G) for his car and tacos...
Juan has an income of $ 500 and consumes gasoline (G) for his car and tacos (T). The respective prices per liter of gasoline and tacos are (PG, PT) = (10,10). Its utility function is a Cobb Douglas function with alpha = beta = 1.
a. What is the Marshallian demand for both goods? (Algebraically)
G * =
T * =
b. What is the indirect utility? (Algebraically)
V (I, pg, Pt) =
c. Calculate the optimal amount Juan consumes of both goods and their level of utility.
G * =
T * =
U * =
d. If the price of gasoline doubles, find the optimal amount Juan now consumes of both goods and his new level of utility.
G * =
T * =
U * =
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
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