*3. We can generalize Problem 1 by stating that there are three commodities Felix con- sumes: air quality, soap, and a basket of other goods, denoted by x. Anna concludes from her research that Felix's utility function is U(x,S,A) = x S A. The price of x is Ooe onSp always 1. Plot two restricted compensated demand functions for soap (price of soap on o 10 V Irw sids mo cnldhomtua be albo m the vertical axis, quantity of soap on the horizontal axis). Recall that a compensated demand function depends on utility rather than income. One demand function should be for A = 4 and the other for A = 5. In both cases, assume the utility level is 100.
*3. We can generalize Problem 1 by stating that there are three commodities Felix con- sumes: air quality, soap, and a basket of other goods, denoted by x. Anna concludes from her research that Felix's utility function is U(x,S,A) = x S A. The price of x is Ooe onSp always 1. Plot two restricted compensated demand functions for soap (price of soap on o 10 V Irw sids mo cnldhomtua be albo m the vertical axis, quantity of soap on the horizontal axis). Recall that a compensated demand function depends on utility rather than income. One demand function should be for A = 4 and the other for A = 5. In both cases, assume the utility level is 100.
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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i need help with question 3
Transcribed Image Text:*3. We can generalize Problem 1 by stating that there are three commodities Felix con-
sumes: air quality, soap, and a basket of other goods, denoted by x. Anna concludes
from her research that Felix's utility function is U(x,S,A) = x S A. The price of x is
Ooe onSp
always 1. Plot two restricted compensated demand functions for soap (price of soap on
o 10 V
Irw sids mo
cnldhomtua
be albo m
the vertical axis, quantity of soap on the horizontal axis). Recall that a compensated
demand function depends on utility rather than income. One demand function should
be for A = 4 and the other for A = 5. In both cases, assume the utility level is 100.
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