What is the income elasticity of demand

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For a person with utility function U=q1q2 the demand function for q1 is q1= Y/(2p1) (Hint: in elasticity expressions when you multiply the partial derivative by pa/q1 or Y/q1 think about substituting for q1 from the demand function above) Questions: 1)what is the price elasticity of demand? 2)what share of income is spent on q1? 3)what is the income elasticity of demand? 4)Using your answers to 1)-3), determine the compensated price elasticity of demand

Reference no: EM13146703

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