Question: Consider an individual making choices over two goods, x and y with prices Px and Py , with income I , and the utility function

Consider an individual making choices over two goods, x and y with prices Px and Py, with income I , and the utility function u(x,y)=min(x,2y).

a) Find the (Marshallian) demand for x and y.

b)Find the indirect utility function and expediture function.

c) Find the compensated (Hicksian) demand for x and y.

d) Use your expenditure function to find the compensating variation for a price increase of $2 for good x, if the initial price was $4 (given u=100, Py=1).

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