Question: u (1, 2) = { T1+ 2x2, 2 < 10 1 x1 + 4x2, x2 > 10 x1 and the constraints are I >

u (1, 2) = { T1+ 2x2, 2 < 10 1 x1

u (1, 2) = { T1+ 2x2, 2 < 10 1 x1 + 4x2, x2 > 10 x1 and the constraints are I > P1x1 + P2x2, x1 > 0, x2 > 0. Suppose that I = 8 and P2 = 1. 1. Find (x*, x) as a function of p1. 2. Sketch the demand for good 1. 3. Consider an interior solution. Is good 1 normal or inferior?

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