Question from Past Microeconomics Qualifying ExamEdit
Spring 2001 - Section II, Question three, George Mason University Give complete answers to three of the following four questions (about 25percent each) Write clear concise and legible answers.:
Suppose Al has the utility function , where and are goods. His income is dollars. The prices of and are and respecitively.
- a. Derive Al's demand for . Be sure to explain your reasoning and mathematics
- b. Determine wheather Al's demand for is downward sloping or not. Be sure to explain your reasoning and mathematics.
- c. Determine whether is a normal good or not. Be sure to explain your reasoning and mathematics.
- d. What is the relationship between the demand for good and the excess demand for good ? If lambda (L) appeared in your calculations, what is its economic interpretation?
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