Amy has a utility function:
u(x, y, z)= x+2lny+lnz
1. Explain what kind of preferences does Amy have? What does this mean for her demand functions?
2. Obtain her demand functions when she has income M and faces prices px, py , pz.. Explain your steps in deriving the demand functions.
3. Identify the income, own price and the cross price elasticity of good y. Discuss whether the good is normal, ordinary and a substitute or complement of the other goods in demand.