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 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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