Please show work and provide steps Laura\'s utility from consuming housing H and

Question

Please show work and provide steps

Laura's utility from consuming housing H and other consumables C is U= 2H2 C6 What standard Cobb-Douglas utility function would generate the same behavioral choices as the above function, if we assume ordinal utility? Find Laura's demand function for housing, Hid, as a function of Ph, Pc and Y (If any of these variables do not affect her demand for housing, show why). In Laura's city, there are 30,000 students who attend college and are seeking housing. Assume each has income of $28,000 per year (perhaps some of this is borrowed money, but we won't worry about that right now). In the short run, imagine that the supply of housing is fixed at 10,000 units. Find the price of housing, Ph (that is, the annual rent), and the quantity of housing rented by each person.

Explanation / Answer

A)YES AS 2+6=8> 1 SO THEY EXIBIT INCREASING MARGINAL UTILITY

B)Hd = 0.25*ph = 2/2+6 *ph

c) hd =10000 implies ph = 4*10000 =40000

quantity =10000/30000 =1/3

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