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U(X,Y) = 5X1/3Y2/3 PX =1->2 PY = 3 I = 120 (a) (30 marks) Find demand...

  1. U(X,Y) = 5X1/3Y2/3 PX =1->2
    PY = 3
    I = 120

    1. (a) Find demand functions X* and Y*

    2. (b) Find the initial optimum, A.

    3. (c) Find the final optimum, C.

    4. (d) Find the decomposition bundle, B

    5. (e) Fill in the blank

      1. X Y
        Income Effect
        Substitution Effect
        Total Effect
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