Question: there are two consumers on the market jim and donna...
There are two consumers on the market: Jim and Donna. Jim’s utility function is U(x, y) = xy. Donna’s utility function is U(x, y) = x 2 y. Income of Jim is mJ = 100 and income of Donna is mD = 150.
a) Find optimal baskets of Jim and Donna when price of y is Py = 1 and price of x is P. (PREVIOUSLY POSTED)
b) On separate graphs plot Jim’s and Donna’s demand schedule for x for all values of P. (PREVIOUSLY POSTED)
c) Compute and plot aggregate demand when Jim and Donna are the only consumers. (PREVIOUSLY POSTED)
d) Plot aggregate demand when there is one more consumer that has identical utility function and income as Donna.