5 5 Suppose the utility function for goods x and y is given by utility U(x, y ) xy y a Calculate the uncompensated (Marshallian) demand functions for x and y, and describe how the demand curves for x and y are shifted by changes in I or the price of the other good b c Calculate the expenditure function for x and y Use the expenditure function calculated in part (b) to compute the compensated demand functions for goods x and y Describe how the compensated demand curves for x and y are shifted by changes in income or by changes in the price of the other good

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Question: 5.5 Suppose the utility function for goods x and y is given by utility = U(x, y ) = xy + y. a. Calculate the

5.5 Suppose the utility function for goods x and y is given by utility = U(x, y

) = xy + y.

Calculate the uncompensated (Marshallian)

demand functions for x and y, and describe how the demand curves for x and y are shifted by changes in I or the price of the other good.

Calculate the expenditure function for x and y.

Use the expenditure function calculated in part (b)

to compute the compensated demand functions for goods x and y. Describe how the compensated demand curves for x and y are shifted by changes in income or by changes in the price of the other good.

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