Question: 1. (a) Briefly describe the differences between the ordinary demand function and the compensated demand function. Provide an expression that relates the two. (b) A

 1. (a) Briefly describe the differences between the ordinary demand function

1. (a) Briefly describe the differences between the ordinary demand function and the compensated demand function. Provide an expression that relates the two. (b) A consumer enjoys two goods, , and z2, according to the following utility: u(x) = 12 + 12. The prices of the goods are p = (p1, p2), and the consumer's income is w. Find the consumer's ordinary demand functions and the compensated demand functions for r, and $2. (c) Suppose that the consumer's income is w = 125, and that the price vector de- creases from p = (25, 10) to p' = (20, 10). Find the minimum amount of money that would compensate the consumer for the price change and make him/her just as well of as s/he was before the price decrease

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