Question 3 Consider the utility function of the form: U = x¨*x2² Given the budget constraint: P1X1 + P2X2 = M Show that the implied Marshallian demand curves are: a1 M X1 = (a1 + a2) P1 a2 X1 = (a1 + a2) P2

Imagine Billy eats brownies (B) and cookies (C) and considers them to be perfect substitutes. Brownies yield him four times more utility than cookies. Which of the following equations could describe his utility function? U= 0.25B + C O U=B+ 0.25C U = B'C OU = BC4 %3D

Please don't use Ai solution

Consider an individual with preferences represented by the following utility function: U (x1, 12) = x{x; The individual faces prices: P1 = 0.5; p2 = 1 And has income: M = 250 If the price of good one increases to p1 =1 For this change in price, mark all of the following answers that are correct. (EV = equivalent variation; CV = compensating variation) O In absolute value, EV is greater than Cv O In absolute values, change in Consumer surplus is smaller than CV. O In absolute value, CV is greater than EV In absolute values, change in Consumer Surplus is smaller than EV. There is not enough information to determine an answer.