Derive the expenditure function for utility level u

Reference no: EM13207654

A consumer of two goods faces positive prices for both goods and has positive income. Her preferences over consumption of good 1 and good 2 are represented by the following utility function:
u(x1; x2) = e^(x1+ln(x2))^.5
Assume, the price of good 1 is 1 (p1 = 1) and the price of good two is p2 > 0. Use m to denote income.

a. What properties about utility functions will make this problem easier to solve?

b. Which of the non negativity constraints on x1; x2 will bind for small m?

c. Derive for the Marshallian demand functions and the indirect utility function.

d. Derive the expenditure function for utility level u.

Reference no: EM13207654

Questions Cloud

How are students distributed across classes of freshman : What is the proportion of females at StatCrunchU and determine a range of plausible values for this proportion. Is this proportion significantly larger than 0.5?

Compute the boiling and freezing points : A solution is prepared by dissolving 18.536g of calcium nitrite in 183.544g of distilled water. Calculate the boiling and freezing points of this solution.

What are marshallian-market demand functions : Consumer 1 has expenditure function e1(p1; p2; u1) = u1sqrt(p1p2) and consumer 2 has utility function v(x1; x2) =x1x2^(alpha) What are Marshallian (market) demand functions for each of the goods by each of the consumers

Determine the factors of safety against sliding : assume hydrostatic uplift varies uniformly from full hydrostatic head at the heel of the dam to zero at the toe. consider 1m length of dam.

Derive the expenditure function for utility level u : A consumer of two goods faces positive prices for both goods and has positive income. Her preferences over consumption of good 1 and good 2 are represented by the following utility function: u(x1; x2) = e^(x1+ln(x2))^.5

Localization of behavior-brain relationships : What methods were used to conduct research concerning the localization of behavior/brain relationships? Which method do you feel is the most effective? Why?

What is the probability that the second explosion : Cities cover approximately 0.5% of the Earth's land area, which itself constitutes 29% of the total surface of the planet. What is the probability that the second explosion in part (b) occurs over a city? Assume an equally likely probability of im..

How does tullock define old testament prophecy : How does Tullock define Old Testament prophecy? Based on this definition, how is the term prophecy often misunderstood today?

How much was the initial investment at an interest rate : A company that manufactures regenerative thermal oxidizers made an investment 10 years ago that is now worth $1,300,000. How much was the initial investment at an interest rate of 15% per year (a) simple interest and (b) compound interest?

User Account

All Pages