Suppose jane buys only two goods x and y and she spends an


1. Suppose Jane buys only two goods X and Y , and she spends an income I on these two products. Suppose the price of X is px and the price of Y is py. She derives utility by consuming X and Y . The amount of utility she gets by consuming x units X and y units of Y is given by the utility function U(x, y) = xy.

2. Determine her demand curve for X.

3. How would your answer change if her utility function is U(x, y) = x + 2y?

4. How would your answer change if her utility function is U(x,y) = min (x,2y)? That is, x and y are perfect complements.

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Microeconomics: Suppose jane buys only two goods x and y and she spends an
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