Question: Individual number- 1 Minimum number - 1 Max number- 9 Median - 3 1-digit- 8 2-digit - 26 An agent has a utility function over
Individual number- 1
Minimum number - 1
Max number- 9
Median - 3
1-digit- 8
2-digit - 26
An agent has a utility function over goods 1 and 2 of the form , where c is your 1-digit number and d is your minimum number. The agent's income is equal to your 2-digit number. Initially, the price of good 1 is your median number and the price of good 2 is your individual number.
Let the price of good 1 change to your maximum number. For good 1, determine for this price change the
a) total price effect
b) the substitution effect
c) the income effect
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