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You are asked to plan a budget of University of Connecticut for the next year. The...

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Economics

You are asked to plan a budget of University of Connecticut forthe next year. The two major expenses involve computers, x1 andclassroom furniture, x2. The university utility function is givenbyU(x1, x2)=ln x1 + 2ln x2

a) Find optimal \"consumption\" of computers and furniture if P1=2and P2=4 and the available funds are m= 60.

b) Is computer an ordinary or a Giffen good ? Determin whethercomputer is a gross complement,gross substitute or neither, forclassroom furniture. (Explain these questions using partialderivatives)

c) Please draw the price offer curve for x2 given p1=4 and m =60.

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