2. Given U=X4Y4; Px = 80; Py = 100; 1 = 800 a. Solve for X,...

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2. Given U=X4Y4; Px = 80; Py = 100; 1 = 800 a. Solve for X", Y*, and U*. (6 points) b. Suppose income decreases to 400, what will be the new values of X, Y, and U*? (4 points) c. Illustrate the income consumption curve, as well as separate Engel curves for X and Y. (4 points) 2. Given U=X4Y4; Px = 80; Py = 100; 1 = 800 a. Solve for X", Y*, and U*. (6 points) b. Suppose income decreases to 400, what will be the new values of X, Y, and U*? (4 points) c. Illustrate the income consumption curve, as well as separate Engel curves for X and Y. (4 points)

Answer rating: 100% (QA)

a Solving for X Y and U Given utility function U XY and prices Px 80 Py 100 and income I 800 we can ... View the full answer