problem code : 030609MICRO

Posted by vishruti on Jun 03, 2009; 10:44am
URL: http://discussion-forum.276.s1.nabble.com/problem-code-030609MICRO-tp3017449.html

A consumer purchases only two goods and divides his expenditure equally between them. Is he worse off when his income goes up by 5% and the price of one of the goods goes up by 10%? Assume Cobb Douglas preferences      u(x1,x2) = (x1 . x2) ^ 1/2