Determine income own price and cross price elasticities of

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Amy has a utility function:

u(x,y,z)= x+2lny+lnz

(a) What kind of preferences does Amy have? Explain. What does this mean for her demand functions?

(b) Derive her demand functions when she has income M and faces prices px, py , pz.. Explain your steps in deriving the demand functions.

(c) Find the income, own price and cross price elasticities of good y. Explain whether the good is normal, ordinary and a substitute or complement of the other goods in demand.

Reference no: EM13388418

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