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

Algebra, Multiple response question.Zack puts a mug of water ni his microwa...

Multiple response question.Zack puts a mug of water ni his microwave oven. He knows that the final temperature of the water will be a function of the number of seconds he heats the

Theorem to computer the integral, Use green's theorem to computer the integ...

Use green's theorem to computer the integral F . dr where F = ( y^2 + x, y^2 + y) and c is bounded below the curve y= - cos(x),, above by y = sin(x) to the left by x=0 and to the r

Example of partial fraction decomposition, Example of Partial Fraction Deco...

Example of Partial Fraction Decomposition Evaluate the following integral. ∫ (3x+11 / x 2 -x-6) (dx) Solution: The 1 st step is to factor the denominator so far as

Explain identifying conic sections, Explain Identifying Conic Sections ...

Explain Identifying Conic Sections The graph of a quadratic equation in the variables x and y, like this one, x 2 + 3y 2 + 6y = -4, is a conic sections. There are three kind

What is graphing statistics explain , What is Graphing Statistics explain ?...

What is Graphing Statistics explain ? The number of times that an event occurs is called its frequency. One of the ways that you can compare or display different frequencies is

Control a liner interpolation between original mesh, Use your keyboard to c...

Use your keyboard to control a linear interpolation between the original mesh and its planar target shape a. Each vertex vi has its original 3D coordinates pi and 2D coordinates

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