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Q2 Given the total cost function Ca+bY with agt00ltb.pdf

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Q2 Given the total cost function C=a+bY, (with a>0;0<b<1 ): a. Find its marginal function and its average function. b. Find the income elasticity of consumption CY, and determine its sign, assuming Y>0. c. Show that this consumption function is inelastic at all positive income levels. Q3 Find the total differential dy, given a. y=(x1+x2)x1 b. y=(x1+x2)2x1x2.

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Q2 Given the total cost function C=a+bY, (with a>0;0<b<1 ): a. Find its marginal function and its average function. b. Find the income elasticity of consumption CY, and determine its sign, assuming Y>0. c. Show that this consumption function is inelastic at all positive income levels. Q3 Find the total differential dy, given a. y=(x1+x2)x1 b. y=(x1+x2)2x1x2

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