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Business, 02.03.2020 23:06 macinnoodlezz

Suppose a consumer buys clothing for the heat it provides and that each unit of clothing provides 2 units of heat. Assume that the consumer also buys housing for the shelter it provides, and that one unit of housing provides one unit of shelter. If H is the number of housing units and C is the number of clothing units consumed, then his utility is U(H, C)min H, 2C. The per-unit prices of housing and clothing are ph and pe, respectively, and his income is m. (a) Set up the maximization problem and derive the demand functions for H and C*.(b) Re-do part (a) assuming that U H. C) H 2C, ph-2. pc-3. and m-300.

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