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This question explores some features of the quasilinear utility function. Avi’s utility function is ?(?, ?)...

  1. This question explores some features of the quasilinear utility function. Avi’s utility function is ?(?, ?) = 4?1/2 + ?. Barry’s utility function is ?(?, ?) = ? + 3?1/3.

    1. Derive Avi’s demand functions for goods x and y. What must be true of Px for her to be at a

      corner solution? Which good would not be consumed under this condition? (10 points)

    2. Now assume an interior solution and graph Avi’s income consumption curve. (3 points)

    3. Derive Barry’s demand functions for goods x and y. What must be true of Px for him to be at

      a corner solution? Which good would not be consumed under this condition? (10 points)

    4. Now assume an interior solution and graph Barry’s income consumption curve. (3 points)

    5. Please Make sure your hand writing is clear, and that you label each answer with the correct question. also, please graph each income consumption curve. Thank you!

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