3. Tom's utility function is U (x; y) = 3x+4y: His budget constraint is ax + by = 1, a, b, I > 0 a) Derive the demand function of x. b) Derive the demand function of y. c) Please draw the demand curve for y. d) If the price of x increases from a to c; what would the value of the Hickis substitution effect of x be?

3. Tom's utility function is U (x; y) = 3x+4y: His budget constraint is ax + by = 1, a, b, I > 0 a) Derive the demand function of x. b) Derive the demand function of y. c) Please draw the demand curve for y. d) If the price of x increases from a to c; what would the value of the Hickis substitution effect of x be?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 6QFR

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