PROBLEMS/SITUATIONS: 1. Assume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U = X2+ Y2 derive the Marshallian demand function for good Y and evaluate the type of good. 2. Assume you spend your entire income on two goods X & Y with prices given as PX & PY , respectively. Prices and income (I) are exogenous and positive. Given that U = X2 Y2 , derive the Hicksian demand function for good Y.
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PROBLEMS/SITUATIONS:
1. Assume you spend your entire income on two goods X & Y with prices given as PX & PY, respectively. Prices and income (I) are exogenous and positive. Given that U = X2+ Y2 derive the Marshallian
2. Assume you spend your entire income on two goods X & Y with prices given as PX & PY , respectively. Prices and income (I) are exogenous and positive. Given that U = X2 Y2 , derive the Hicksian demand function for good Y.
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