5.5 Suppose the utility function for goods x and y is given by utility Ux, y xy y: a. Calculate the uncompensated

5.5 Suppose the utility function for goods x and y is given by utility ¼ Uðx, yÞ ¼ xy þ 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. Calculate the expenditure function for x and y.

c. 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.