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Suppose John spends his income (I) on two goods, x and y, whose market prices are Px and Py, respectively. His preferences are represented by the utility function u(x,y)=lnx+2lny (MUx= 1/x, MUy= 2/y)
A) Derive his demand functions for x and y. Are they homogeneous in income and prices?
B) Assuming I = $60 and Px= $1, graph his demand curve for y.
C) Repeat part (B) for the case in which Px= $2.
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