A consumer has the following utility function

U (x₁, x₂) = x₁(x₂ + 4)

Prices of the two goods x₁ and x₂ respectively are p₁ and p₂ and the consumer has income m. We assume that all prices and income are strictly positive. Furthermore, throughout this question we assume that m > 4p₂.

Consumer expenditure data in developing countries show that individuals

• spend more than half of their income on food
• proportion of income spent on food declines as income increases.

(i) Can either of the two goods - x₁ or x₂ - represent food? Explain your answer.

(ii) Compute the missing values of elasticities in the following table assuming M=10,p₁ =2, and p₂ =1.

	x2
Income elasticity
Absolute value of own price elasticity
Cross price elasticity