For the following problem, the consumer has Leontief preferences, as given below

Question

For the following problem, the consumer has Leontief preferences, as given below:
Max (min[3x,y + 1])
s.t. pxx + pyy m, x 0, y 0
Solve for the demand functions (neatly show work and circle answer):
(a) x(px,py,m) =
(b) y(px,py,m) =
Question 2 continued: Calculate the following elasticities for demand of good x (neatly show work and circle answer): (c) Price elasticity of demand, ex,px =
(d) Cross price elasticity of demand, ex,py =
(e) Income elasticity of demand, ex,m =
Solve for the compensated demand functions (neatly show work and circle answer):
(f) xc(px,py,U¯) =
(g) yc(px,py,U¯) =
(h) Graph the demand function for x(px,py,m) when py = 1 and m = 100 (place x on the x-axis and px on the y-axis).

Explanation / Answer

Multiple questions asked.

Ques. 1 is answered below:

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