Question
1. Your utility function over candy, C, and bananas, B, is U(C,B)= ln(C)+B a) If the...
1. Your utility function over candy, C, and bananas, B, is
U(C,B)= ln(C)+B
a) If the price of candy is $0.50 and the price of bananas is $1.50, what is your demand for candy?
b) If the price of candy is now $1, and the price of bananas is Pb, what is your demand for candy? (hint: it will be a function of Pb)
c) Using the numbers from part b and an income of $5, what is your demand for bananas?
d)Graph the demand curve for bananas from the demand function you calculated in part c. Label the point at which the demand for bananas falls to zero
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