Derive consumers demand for x and y in terms of parameters

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Reference no: EM13238642

Assume a comsume with the utility funciton
U = U(x,y) = X2Y2

and the typcial budget constraint

M = PxX + PyY

a. Set up the constrained maximization problem and derive the first-order conditions.

b. Derive the consumer's demand for X and Y in terms of parameters.

c. Derive the own-prices of elasticiites of demand. Do the demands obey the law of demand?

Reference no: EM13238642

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