Question: 2. Consider a household with preferences over N goods represented by the constant elasticity of substitution utility function: U(I1,...,:IIN)= [231:5] pf 1. (1) a. Calculate

2. Consider a household with preferences over N goods represented by the constant elasticity of substitution utility function: U(I1,...,:IIN)= [231:5] pf 1. (1) a. Calculate the household's marginal utility from consuming good i. b. How does this marginal utility depend on the number of goods consumed, N ? How is this affected by the parameter p? c. What happens if p = 1? Suppose now that N = 2 so that the household consumes just 2 goods and the utility function is now: U(:I:1,:1:2) = [$14 351% p

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