Felix loves steaming shows on two platforms, A and B. He is willing to substitute 2 hours spent on A for 3 hours spent on B. Let xA denote his time spent on A and xB denote his time spent on B. (a) Write down one example of Felixs utility function u(xA, xB ). (2 Marks) (b) Let pA denote platform As price of streaming service and pB denote platform Bs price of streaming service. Felixs budget is denoted as m. Derive his demand functions xA(pA, pB , m) and xB (pA, pB , m). (6 Marks) (c) On a graph, draw Felixs price offer curve when pB changes. (4 Marks)

(d) Suppose that pA = 15 and pB = 9. On another graph, draw Felixs Engel curve for his time spent on platform B. Clearly label the slope of the curve. (4 Marks) (e) Under what condition of prices is Felixs time spent on platform A a normal good? Under what condition of prices is Felixs time spent on platform B an ordinary good? (4 Marks)

here's the result of a and b, only solve c, d, e

1. Felix's fentetility function can be written as. (a) u(xA,xB)=3xA+23xB b1m=PAxA+PBxB L=3xA+xB+(mPAxAPBxB) Take the FOC's. xxxAL=3PA=0 xBL=B2PB=0 L=mPAxAPBxB=0 2xA=3xB mPAxAPB32xA=0 (PA+32PB)XAXA=m=PA+32PBm xB=32xA=3PA+2PB2m 1. Felix's fentetility function can be written as. (a) u(xA,xB)=3xA+23xB b1m=PAxA+PBxB L=3xA+xB+(mPAxAPBxB) Take the FOC's. xxxAL=3PA=0 xBL=B2PB=0 L=mPAxAPBxB=0 2xA=3xB mPAxAPB32xA=0 (PA+32PB)XAXA=m=PA+32PBm xB=32xA=3PA+2PB2m