Derive the hicksian demand function using indirect utility , Mathematics

Assignment Help:

(a) Derive the Marshalian demand functions and the indirect utility function for the following utility function:

u(x1, x2, x3) = x1 1/6 x2 1/6 x3 1/6    x1≥ 0, x2≥0,x3≥ 0

 [Hint: Try to make use of your results from problem 3 in Assignment 1 instead of redoing all the calculations here.]

(b) Using the indirect utility function that you obtained in part (a), derive the expenditure function and from it, derive the Hicksian demand function for good 1.

(c) Jack and his grandfather are sitting at the dinner table, discussing their lives. Both share the same utility function as given in part (a). Jack is boasting about his $5000 a month salary, with per-unit prices of x1, x2 and x3 being $4, $4 and $16 respectively. Jack's grandfather claims that the old days were much better because although his salary was $500 a month, the per-unit prices of x1, x2and x3 were all only $1. Do you agree with his grandfather?

 


Related Discussions:- Derive the hicksian demand function using indirect utility

Fractions, kim had 1/2 an orange. she gave Linda 1/4 of this. What fraction...

kim had 1/2 an orange. she gave Linda 1/4 of this. What fraction of the whole orange did Linda get?

Proof integral function, Proof of: if f(x) > g(x) for a x b th...

Proof of: if f(x) > g(x) for a x b then a ∫ b  f(x) dx > g(x). Because we get f(x) ≥ g(x) then we knows that f(x) - g(x) ≥ 0 on a ≤ x ≤ b and therefore by Prop

Regrouping, in regrouping if we have abig number in the end what should i d...

in regrouping if we have abig number in the end what should i do?add an number on top of it,please help

How to change improper fractions to mixed/ proper fractions, how do you cha...

how do you change an improper fraction to a mixed number or whole or proper

Fraction word problems, Alan had 6 books. He read 1/3 of books last week. ...

Alan had 6 books. He read 1/3 of books last week. How many books did Alan read last week?

Show that a slope will vary along a curve, Can you show that a slope will v...

Can you show that a slope will vary along a curve (as opposed to a straight line)?

Integration, find the area bounded by the curve y=5x^2-4x+3 from the limit ...

find the area bounded by the curve y=5x^2-4x+3 from the limit x=0 to x=5

Horizontal tangents for parametric equations, Horizontal tangents for Param...

Horizontal tangents for Parametric Equations Horizontal tangents will take place where the derivative is zero and meaning of this is that we'll get horizontal tangent at value

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd