3. An individual has a utility function given by u(x₁, x₂) = (x₁71) a (x₂-7₂)³ 71 and 2 are subsistence consumption amounts and a + 8 = 1. (a) Derive the

Marshallian demands for ₁ and 2₂? = (b) Derive the Marshallian price elasticities and income elasticities. (c) Prices in the base period are given by pto (pp). Suppose there is a price change and prices become pt¹ = (p₁, p2¹). What is the cost of living index that measures the effect from this price change?