Amy has a utility function
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Amy has a utility function:
u(x,y,z)= x+2lny+lnz
(a) What kind of preferences does Amy have? Explain. What does this mean
for her demand functions?
(b) Derive her demand functions when she has income M and faces prices px,
py , pz.. Explain your steps in deriving the demand functions.
(c) Find the income, own price and cross price elasticities of good y. Explain
whether the good is normal, ordinary and a substitute or complement of
the other goods in demand.
12 years ago
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