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6. Yiwei buys only two goods. Her utility function is Cobb-Douglas. Her demand functions have which...

6. Yiwei buys only two goods. Her utility function is Cobb-Douglas. Her demand functions have which of the following properties? a. Her demand for one of the two goods does not depend on income.
b. Her demand for neither good depends on income.
c. Her demand for each of the goods depends on income and on the prices of both goods.

d. Her demand for each of the two goods depends only on her income and on the price of that good itself. e. One of the goods is an inferior good and the other is a normal good.

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Answer #1

Yiwei demand functions have the following property

Her demand for each of the two goods depends only on her income and on the price of that good itself.

Option(D)

As in the cobb Douglas function when the price of good x changes.the demand for good y does not change so the goods are neither substitutes nor complements to one another and there is no cross price effects on the derived demands and demand for each good is derived from the given share of each good in the Cobb douglas function.

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