Just struggling with this question, just looking for a quick demonstration on how to go about answering it.
Suppose that Sally's preferences over baskets containing food (good x), and clothing (goody), are described by the utility function U(x, y) = √x+y. Sally's corresponding margina lutilities are, MUx =1(over)2√x and MUy = 1.
Use Px to represent the price of food, Py to represent the price of clothing, and I to represent Sally's income
Find Sally's food demand function, and Sally's clothing demand function.For the purposes of this question you should assume that I/Py ≥ Py/4Px.