Let u (x1, x2) = 0.3In (x1) + 0.7In (x2). These represent preferences that are smooth and convex. The demand for this consumer must be in the interior. Find the demand for this consumer when the budget is m and the prices of Good 1 and Good 2 are P1 and P2 respectively. What happens to demand of Good 1 when Pi is doubled (becomes 2p1)?

Let u (x1, x2) = 0.3In (x1) + 0.7In (x2). These represent preferences that are smooth and convex. The demand for this consumer must be in the interior. Find the demand for this consumer when the budget is m and the prices of Good 1 and Good 2 are P1 and P2 respectively. What happens to demand of Good 1 when Pi is doubled (becomes 2p1)?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 25SQ

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