3. A consumer has a utility function defined over three goods, U(x1,x2,x3). At a given set...
3. A consumer has a utility function defined over three goods, U(x1,x2,x3).
At a given set of prices and income (p1,p2,p3),
a. Can all three goods be necessities
b. Can one good be inferior and the other two luxuries
c. Find the income elasticity of good 1 if s2 = 0.2, s3 = 0.5, n2 = 2, and n3 = 1, where sj is the budget share of good j and nj is the income elasticity of good j.
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3. A consumer has a utility function defined over three goods,
U(x1,x2,x3).
At a given set...
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