Jose Consumes Wallets (Q₁)and a Composite of Other Goods (Q₂)

question 55

Short Answer

Jose consumes wallets (q₁)and a composite of other goods (q₂).The price of wallets is p₁ and the price of other goods is p₂=1.Jose's utility from wallets depends also on his income-with a higher income,he values a wallet more because he has more to put inside it! His utility is given by the equation
U(q₁,q₂)= q₁Yq₂
Derive Jose's demand for wallets.

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