Question: 1. Suppose that an individual with income I cares about two goods, X and Y. The price of the two goods is px and

1. Suppose that an individual with income I cares about two goods, X and Y. The price of the two goods is px and py. The indi

1. Suppose that an individual with income I cares about two goods, X and Y. The price of the two goods is px and py. The individual has the following utility function: U(X,Y)=X+Y (1) (For simplicity, suppose that Y can take negative values.) (a) Find the Marshallian (uncompensated) demand for X and Y. How does the level of income affect the demand of X and Y? (b) Find the indirect utility function.

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