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Business, 18.11.2019 20:31 steve4020

Iam sure you remember mark and linda, and their two daughters, anne and beth, from problem set 3. as you recall, mark and linda must decide how to allocate their budget across perfectly divisible semesters of college education for their daughters. let xa denote the semesters allocated to anne and let xp denote the semesters allocated to beth. the corresponding prices per semester are denoted by pa and ps. the parents have preferences described by the utility function: (xa, xb) - xa + 3ln(xs). a. find the demand functions for semesters of college education of anne and beth, in terms of m, pa, and po. hint: consider the possibility of kinks. b. in a graph, draw the income expansion path. focus on budgets between $1,000 and $40,000. c. in a new graph, draw a demand curve for xa (i. e. the relationship between pa and xx) given m - $64,000 and pe - $8,000. in the same graph, draw two additional demand curves: one assuming m = $64,000 and pe = $12,000, and another assuming m - $80,000 and pe - $8,000. properly label them. d. in a graph, draw the demand curve for xs given m=$64,000 and pa - $8,000. in the same graph, draw two additional demand curves: one assuming m = $64,000 and pa-$12,000, and another assuming m = $80,000 and pa - $8,000. properly label them. in 2b assume both prices are equal to $8,000

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