Question: (2) In class we solved for the Marshallian demand and indirect utility function for a consumer with a CobbDouglas utility function. (a) What is the

(2) In class we solved for the Marshallian demand and indirect utility function for a consumer with a CobbDouglas utility function. (a) What is the price elasticity of good 1 (with respect to its own price)? What is the income elasticity of good 1? Suppose at current prices an income, the consumer buys 100 units of good 1. Approximately, what would be his consumption of good 1 if the price of good 1 increased by 1% while is income increased by 2%? (b) Is good 2 a gross substitute for good 1'? (c) Verify that Roy's identity is satised in this case

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