Problem 2Joan has the following utility function: u(x, y) = 5x + 3y.(a) Find Jane's marshallian demands.(b) Find Jane's hicksian demands.Consider that income is I = $8, and prices are given as p = $4, Py = $2.(c) Does Jane have enough money to attain a utility level of 20? Justify your answer.(d) Assume thè price of y marginally increases. Find the total, income and substitutioneffect for r due to the change in py.

Answer in step 2. Mention D part separately.

Problem 2 Joan has the following utility function: u(x, y) = 5x + 3y. (a) Find Jane's marshallian demands. (b) Find Jane's hicksian demands. Consider that income is I = $8, and prices are given as p. = $4, Py = $2. %3D (c) Does Jane have enough money to attain a utility level of 20? Justify your answer. and substitution

Problem 2 Joan has the following utility function: u(x, y) = 5x + 3y. (a) Find Jane's marshallian demands. (b) Find Jane's hicksian demands. Consider that income is I = $8, and prices are given as p. = $4, Py = $2. %3D (c) Does Jane have enough money to attain a utility level of 20? Justify your answer. and substitution

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.5P

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