Derive demand schedule based on standard budget constraint


Assume U = U(X,Y) = (X3/2 + Y3/2 )1/2:

a. Derive the demand schedule for X based on a standard budget constraint, M = (PX)X + (PY)Y and assumed utility maximization.

b. Describe the impact of both prices and income on the demand schedule.

c. Show/graph the impact on the budget constraint where a 10% per unit tax is imposed on X.

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Microeconomics: Derive demand schedule based on standard budget constraint
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