Posted by **Anonymous** on Friday, February 21, 2014 at 8:29pm.

1.. Suppose that U(x; y) = min(x; y) with px = 1 and py = 1. Describe and

illustrate the income and substitution effects of an increase in the price of

good y. What does this imply about a tax imposed on good y..

2.. Let U(x; y) = 5x:8y:2 showing all derivation work, find:

(a) the Marshallian demand functions for x and y

(b) the Indirect Utility Function

(c) the compensated demand functions xc and yc

3….. Suppose that Timmy just graduated from college and has two job offers in two distinct

cities. Timmy gains utility from only the consumption of goods x and y and has a utility

function U(x; y) = . In City A, Timmy would earn $50 and the prices of x and

y are $42 and $12, respectively. In City B, Timmy would earn $40 and the prices of x

and y are $32 and $8, respectively. Will Timmy take the job in City A or City B and

how much utility would he gain in each city

- economics -
**Anonymous**, Sunday, February 23, 2014 at 9:20pm
none of the above

## Answer This Question

## Related Questions

- Economics - 1. Using AD/AS, describe the short-run and long-run effects of an ...
- economics - When the price of X is $1 and the price of Y is $1 and income is I, ...
- Economics - What is the computing? in terms of math Industry structure is often...
- Microeconomics - 1. The utility function is given by: U=x+y and the budget line ...
- ECON Firm - Suppose you have an industry with 20 firms and the CR is 30%. How ...
- economics - suppose the income elasticity of demand for toys is +2.00. this ...
- Micro Economics - Briefly explain the following: (a)Economic cost and accounting...
- microeconomics - Fact 1: "The substitution effect(SE) must ALWAYS be negative (i...
- economics - Suppose average movie attendance is 250 million tickets when prices ...
- Economics - The Own price elasticity of demand for good X is -2, its income ...

More Related Questions