Question: 6.8 Example 6.3 computes the demand functions implied by the three-good CES utility function Ux, y, z% 1 x % 1 y % 1 z

6.8 Example 6.3 computes the demand functions implied by the three-good CES utility function Uðx, y, zÞ¼% 1 x % 1 y % 1 z

:

a. Use the demand function for x in Equation 6.32 to determine whether x and y or x and z are gross substitutes or gross complements.

b. How would you determine whether x and y or x and z are net substitutes or net complements?

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