1.51 Consider the utility function, u(x1, x2) = (x1)1/2 + (x2)1/2.
(a) Compute the demand functions, xi(p1, p2, y), i = 1, 2.
(b) Compute the substitution term in the Slutsky equation for the effects on x1 of changes in p2.
(c) Classify x1 and x2 as (gross) complements or substitutes
Dear adv micro 1.51, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order