joe spends her money on two things: food and clothes. Her utility function over food and clothes is given by u(f, c) = 2f c + 2f.
(a) [Assume that the prices of food (pf ) and the price of clothes (pc) are linear, so Joe can buy as much clothes and food as she wants without those prices changing. Solve for Joe.s demand function for clothes. Reminder: we have not specified prices or income, so these should appear as parameters in your demand functions.
(b) If Joe has $100, and the price of food is $2, and the price of clothes is $8, how much food and clothes does Joe purchase?
(c) Is food a normal or an inferior good for Joe? How do you know?

Answer rating: 100% (QA)

a Demand function for clothes To derive Joes demand function for clothes well use the following step... View the full answer