Answer no 4 and 3. Type only the answers, do not handwritten. 3. Suppose that initially Px = 2, Py = 8, I = 96 and the Marshallian demand function for0.510.5Px - 0.5. Calculate the own price & incomegood Y is given by Y* =PyPyelasticities of demand for good Y. Interpret your computed values and say somethingabout the type of good.4. Suppose the economy has 100 units each of goods X and Y and the utility functions of the(only) 2 individuals are: Ua (Xa,YA)pareto-improvement is possible if, initially, goods are divided equally between the twoindividuals.X0.25 y0.75, UB (XB, YB)X0.75 y0.25. Show that%3D%3D

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Suppose that initially Px = 2, Py = 8, 1 = 96 and the Marshallian demand function for %3D 0.51 0.5Px - 0.5. Calculate the own price & income good Y is given by Y* = Py Py elasticities of demand for good Y. Interpret your computed values and say something about the type of good. Supnose the economy has 100 units each of goods X and Y and the utility functions of the

Suppose that initially Px = 2, Py = 8, 1 = 96 and the Marshallian demand function for %3D 0.51 0.5Px - 0.5. Calculate the own price & income good Y is given by Y* = Py Py elasticities of demand for good Y. Interpret your computed values and say something about the type of good. Supnose the economy has 100 units each of goods X and Y and the utility functions of the

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.1P

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