Consider an individual whose preferences are represented by the utility function U(x1,x2) = min {3x1+x2 , x1+3x2}. For this individual, Calculate her demand function X1* (P1, P2,m) Calculate her own price, cross price, and income elasticities at X1*(1, 2, 24) and at X1*(1, 4, 24). Based on these, can you say the goods 1 and 2 are (gross, or Marshallian) complements or substitutes?

Consider an individual whose preferences are represented by the utility function U(x1,x2) = min {3x1+x2 , x1+3x2}. For this individual, Calculate her demand function X1* (P1, P2,m) Calculate her own price, cross price, and income elasticities at X1(1, 2, 24) and at X1(1, 4, 24). Based on these, can you say the goods 1 and 2 are (gross, or Marshallian) complements or substitutes?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 8QFR

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