Question: Slutsky.Consider a consumer with utility function U ( x , y ) = 2 xy . Her income is I = 1 5 , andprices
Slutsky.Consider a consumer with utility function U x yxy Her income is I andprices are given by px and py Address the following questions:a Find the demand functions.b Find the optimal bundle.c Find the price elasticity of good yAssume the price of good x increases up to px d Find the income effect, the substitution effect and the total effect.e Determine whether the good x is normal or inferiorf Determine whether the good x is a Giffen goodg Are goods x and y substitutes, complements, or independent goods?
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