Question: 1 Stone-Geary utility function A consumer maximizes the utility function U (:31, x2) = 1n (x1) +ln (3:2 1) subject to the usual budget constraint

1 Stone-Geary utility function A consumer maximizes the utility function U (:31, x2) = 1n (x1) +ln (3:2 1) subject to the usual budget constraint P1371 + P2322 = Y. 1. Find the demand functions for 371 and $2. They should depend only on P1, P2 and Y. 2. What is the minimum income required to have a utility level greater than 00? . Is good 1 normal or inferior? How do you know? Is good 2 normal or inferior? How do you know? . Does the demand for good 1 rise or fall when the price of good 2 rises? What does this tell you? 6. Does the demand for good 2 rise or fall when the price of good 1 rises? What does this tell you

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