Question: Can you please explain why the answer for #3 is A and why the answer for #4 is B 3. Suppose that you have utility

Can you please explain why the answer for #3 is A and why the answer for #4 is B

3. Suppose that you have utility function U(x, y) = min(x, 2y). What happens to the share of income spent on each good (B, ",") when the price of r increases? (a) Share spent on & increases (b) Share spent on y increases (c) Both shares stay the same (d) Both shares decrease (e) Not enough information 4. Let U(x, y) = a' + y' and prices be pr, Py, and income I. What are demand for r and y if pr > py? Hint: draw an indifference curve (a) (x*, y' ) = (4,0) (b) (x* , y' ) = (0, 4) (c) ( ) = ( RPF) (d) (: y ) = ()

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