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Q1. Ollie has 40 dollars, which he decides to spend on x and y. Commodity x costs $13 every unit and commodity y costs $11 every unit. He has the utility function U(x; y) = 6x2 + 4y2 and he can purchase fractional units of x and y.

Q2. Nick insists on consuming 3 times as much of y as he consumes of x (so he always has y = 3x). He will consume these goods in no other ratio. The price of x is 2 times the price of y. Nick has an endowment of 20 x's and 75 y's which he can trade at the going prices. He has no other source of income. Illustrate what is Nick's gross demand for x?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9168170

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