Question: B . ( 2 5 points ) What are Matt's ordinary demand functions, x 1 * * ( p 1 , p 2 , I

B.(25 points) What are Matt's ordinary demand functions, x1**(p1,p2,I) and x2**(p1,p2,I)?
(1) At corner of IC where 31=22=>x1=2x23
(2) and on the budget constraint, p1x1+p2x2=I
So,p12x23+p2x2=I=>x2(23p1+p2)=I=>x2**(p1,p2,I)=I(23p1+p2)
Substitute x** into equation 1 and solve for x1**:x1=2x2**(p1,p2,I)3=2I3(23p1+p2)
 B.(25 points) What are Matt's ordinary demand functions, x1**(p1,p2,I) and x2**(p1,p2,I)?

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