Question: Consider a consumer with the following utility function U (x, y) = x + ln y. a) Compute the individual demand functions. b) Assume that

Consider a consumer with the following utility function U (x, y) = x + ln y.

a) Compute the individual demand functions.

b) Assume that the prices were initially px = 1, py = 1, I = 10 and they have been changed to px = 2, py = 1, I = 10. Compute the exact amount of the total, substitution and income effects on the consumption of good x.

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