There are two consumers on the market: Jim and Donna. Jim's utility function is U(x, y)...

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There are two consumers on the market: Jim and Donna. Jim's utility function is U(x, y) = xy, with associated marginal utility functions MU = y and MU = x. Donna's utility function is U(x, y) = x2y, with associated marginal utility functions MU 2.xy and MU= x². Income of Jim is I = 100 and income of Donna is I = 150. y x = a) Find optimal baskets of Jim and Donna when price of y is P = 1 and price of x is P. y b) On separate graphs plot Jim's and Donna's demand schedule for x for all values of P. c) Compute and plot aggregate demand when Jim and Donna are the only consumers. d) Plot aggregate demand when there is one more consumer that has identical utility function and income as Donna. There are two consumers on the market: Jim and Donna. Jim's utility function is U(x, y) = xy, with associated marginal utility functions MU = y and MU = x. Donna's utility function is U(x, y) = x2y, with associated marginal utility functions MU 2.xy and MU= x². Income of Jim is I = 100 and income of Donna is I = 150. y x = a) Find optimal baskets of Jim and Donna when price of y is P = 1 and price of x is P. y b) On separate graphs plot Jim's and Donna's demand schedule for x for all values of P. c) Compute and plot aggregate demand when Jim and Donna are the only consumers. d) Plot aggregate demand when there is one more consumer that has identical utility function and income as Donna.

Answer rating: 100% (QA)

Q u XYxY MJ 100 a Now for Jim at q m 80 X J T de UXY ... View the full answer