2. The utility function of a consumer over two goods x and y is given by...
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2. The utility function of a consumer over two goods x and y is given by u(x, y) = 20 ln x + 2y I The price of y is 1. Let p denote the price of x. The consumer has an income of M> 10. The consumer's price elasticity of demand for x has a lower absolute value compared to the income elasticity of demand for y. Is this true or false? Explain by calculating both elasticities. 2. The utility function of a consumer over two goods x and y is given by u(x, y) = 20 ln x + 2y I The price of y is 1. Let p denote the price of x. The consumer has an income of M> 10. The consumer's price elasticity of demand for x has a lower absolute value compared to the income elasticity of demand for y. Is this true or false? Explain by calculating both elasticities.
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