(Answered) Please read the following article please cut and

Management Studies

Please read the following article (Please cut and paste):

http://news.yahoo.com/blogs/lookout/americans-spending-less-not-health-care-gas-170917461.html

The article is stating that the expenditure on certain goods have increased even when income has declined and price of these goods has increased also. My question is:

a. Can Cobb-Douglas utility function explain this phenomenon? Explain why or why not.

b. What kind of utility function can best explain this situation?

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