Question #35437

Suppose that there are two goods, X and Y . Thomasíutility function is

U = XY + X. The price of X is P, and the price of Y is $40. Income is

$200. Derive his individual demand for X as a function of P.

U = XY + X. The price of X is P, and the price of Y is $40. Income is

$200. Derive his individual demand for X as a function of P.

Expert's answer

Suppose that there are two goods, X and Y. Thomas utility function is

U = XY + X. The price of X is P, and the price of Y is $40. Income is

$200. Derive his individual demand for X as a function of P.

Income function is: I = Px*X + Py*Y = 200

P*X + 40Y = 200

The individual demand for X as a function of P will be:

Qd = (200 - 40Y)/P

U = XY + X. The price of X is P, and the price of Y is $40. Income is

$200. Derive his individual demand for X as a function of P.

Income function is: I = Px*X + Py*Y = 200

P*X + 40Y = 200

The individual demand for X as a function of P will be:

Qd = (200 - 40Y)/P

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