There are two goods X,Y with prices p, and p respectively. There is a consumer with...

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There are two goods X,Y with prices p, and p respectively. There is a consumer with a utility function of (x)³ (4y) 0.5-8 where 3 € (0,1/2) and income of M. (a) What is the consumer's demand? (b) How would you determine if the consumer would accept M doubled and p, tripled? (c) How would you find the equivalent variation of only p, to be tripled? There are two goods X,Y with prices p, and p respectively. There is a consumer with a utility function of (x)³ (4y) 0.5-8 where 3 € (0,1/2) and income of M. (a) What is the consumer's demand? (b) How would you determine if the consumer would accept M doubled and p, tripled? (c) How would you find the equivalent variation of only p, to be tripled?

Answer rating: 100% (QA)

A a The consumers demand can be found by solving the following optimization problem Maximize U x 4y0... View the full answer