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There are two types of people that live on planet Economus. The Utility function of each...

  1. There are two types of people that live on planet Economus. The Utility function of each type is given in the table.

Type

Utility

MU1

MU2

I

X1^2X2^6

2XqX2^6

6X1^2X2^5

II

X1^6X2^2

6X1^5X2^2

2X1^6X2
  1. Derive the demand curves for each type. (3)

  

  1. Everyone on the planet has $1,000 of income per period and there are 100 individuals of Type I and 100 individuals that are Type II. Derive the market demand curve for each good. (3)
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