Now suppose p1 and p2 are xed at 3 and 5 find functional

Reference no: EM13392319

A consumer has utility function given by u(x1 , x2 ) = √

x1 x 2 .

(i ) Suppose the price of good 2 and income are ?xed at $5 and $100, respectively. Find the inverse demand function for good 1.(P1 on the left hand side). Is this ordinary demand? Why?

(ii ) Now assume P1 and P2 are ?xed at $3 and $5. What is the functional form of engle curve for both goods? Are they increasing? Why?

Reference no: EM13392319

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