Simon consumes pizza (x) and cola (y). His utility function is U(x,y)= √x √y.
a. Suppose Px= 9, Py= 16, and Income M. Find the utility maximizing quantities of x and y.
b. Find the demand function of x and y.
c. What are the price elasticities of demand for x and y? What are the income elasticities of demand for x and y?
d. What happens to Simon's utility maximizing bundle if all prices and his income increase by the same percentage?
e. Jeff's utility function for x and y as. Find Jeff's demand function for x and y. Derive market demand curve from each demand curve of Jeff and Simon.