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SOLVED: Problem 1. DemandBengt's utility function is U(x) = ln(x) - beerBengt's budget: px Py = mp - price of stampsp - price of beerm - Bengt's budgeta) What is Bengt's demand for beer and stamps?b) Is it true that Bengt would spend every krona in additional income on stamps?c) What happens to demand when Bengt's income changes (i.e. find the income elasticity)?d) What happens to demand when p and pz increase (i.e. find the price elasticities)?Problem 2. DemandJan has fallen on hard times. Hi
SOLVED: Problem 1. DemandBengt's utility function is …
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