Question: Express the utility function in the previous problem in double-log terms. Does the expression confirm your answer to part C of the previous problem? Previous
Express the utility function in the previous problem in double-log terms. Does the expression confirm your answer to part C of the previous problem?
Previous problem
Economists use utility functions to assess the degree of utility or satisfaction consumers receive from consuming goods and services.
The functions are derived using regression techniques and measure satisfaction in hypothetical units called “utils.” A consumer's utility function is estimated to be U = 5X2Y0.2, where X and Y are two consumer goods.
c. What are the elasticities for both X and Y? Calculate and interpret.
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