Question: Madison's preferences are represented by the utility function U(X, Y) = A ln (X) + B ln(Y), where ln stands for the natural logarithm. What

Madison's preferences are represented by the utility function U(X, Y) = A∙ ln (X) + B∙ ln(Y), where ln stands for the natural logarithm. What is her demand for X as a function of her income M and the prices of X and Y, PX and PY? What share of her budget does she spend on X? What share on Y? What is the elasticity of her demand for X with respect to PX? With respect to PY?

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Her demand for X as a function of her income M and the prices of X and Y P X and P Y is X AM A B P X ... View full answer

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