a) Derive his demand functions of good x and good y. b) Look at the demands of good x and good y you found in part (a). Explain how an increase in income would affect the quantity of x and the quantity of y David optimally consumes. [Hint: You can do a visual check or take the partial derivative of the demand of each good with respect to income and check whether this partial derivative is positive or negative] • Is good x a normal good? Is good y a normal good? ●
a) Derive his demand functions of good x and good y. b) Look at the demands of good x and good y you found in part (a). Explain how an increase in income would affect the quantity of x and the quantity of y David optimally consumes. [Hint: You can do a visual check or take the partial derivative of the demand of each good with respect to income and check whether this partial derivative is positive or negative] • Is good x a normal good? Is good y a normal good? ●
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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