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Dafna’s utility function for weekly consumption of apples (X) and bananas (Y) is given by U...

Dafna’s utility function for weekly consumption of apples (X) and bananas (Y) is given by U = 3XY.

a. Derive equations for Dafna’s demand functions for X and Y.

b. Draw a diagram of Dafna’s demand curve for apples (X) when PY = 2.5 and M = 100.

c. Dafna always spends the same fraction of her budget on apples, no matter what the prices. What fraction is that? Explain. (Hint: Use the demand functions from part a.)

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