Question: Mary has the following utility function: u(x, y) = 3 ln(x) + y. Her income is given by I =10 and the prices originally are

Mary has the following utility function: u(x, y) = 3 ln(x) + y. Her income is given by I =10 and the prices originally are px =1 and py =3

(a)What are Mary's marshallian demands?

(b)How much of each good is Mary currently consuming?

(c)What is the utility level that Mary can achieve?

(d)Assume the price of x increases to px = 3, find Mary's new levels of consumption.

(e)Find the total,substitution and income effects for good x caused by the price change. Consider this price change a "large" price change (p= p'x-px=3-1=2)

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