a. [6 points] Derive the demand function for good y for an individual whose utility
function for x and y is given by $U(x, y) = (x + 2)y$, as a function of his budget, $M$, and
prices $P_x$ and $P_y$.
b. [4 points] Calculate the own-price elasticity of demand for good y using the demand
function you derived in part (a).
c. [5 points] Calculate the cross-price elasticity of x and y, $\epsilon_{y,x} = \frac{\%\Delta y}{\%P_x}$? Are goods x and y
complements or substitutes?