prices are px and py, respe… Show more Suppose David spend

prices are px and py, respe… Show more Suppose David spends his income (I) on two goods, x and y, whose market prices are px and py, respectively. His preferences are represented by the utility function u(x; y) = lnx + 2lny (MUx = 1/x;MUy = 2/y). a. Derive his demand functions for x and y. Are they homogeneous in income and prices? b. Assuming I = $60 and px = $1, graph his demand curve for y. c. Repeat part (b) for the case in which px = $2. • Show less

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