ECO - 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
    ECO Problem Solution - Amy has a utility function
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