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

Simultaneous equations, two rolls of carpet cost £574, the first cost £8 pe...

two rolls of carpet cost £574, the first cost £8 per meter, the second which is 7m longer costs £7 p/m. how many meters are there in each roll

Probability, an insurance salesman sells policies to 5 men, all of identica...

an insurance salesman sells policies to 5 men, all of identical age in good health. the probability that a man of this particular age will be alive 20 years hence is 2/3.Find the p

Calculate the area of the skirt to the nearest foot, Pat is making a Christ...

Pat is making a Christmas tree skirt. She needs to know how much fabric to buy. Using the example provided, calculate the area of the skirt to the nearest foot. a. 37.7 ft 2

Simplify, X^2 – y^2 – 2y - 1

X^2 – y^2 – 2y - 1

Transition matrix for the probabilitiy, Suppose research on three major cel...

Suppose research on three major cell phones companies revealed the following transition matrix for the probability that a person with one cell phone carrier switches to another.

Determine the probability , A medical survey was conducted in order to esta...

A medical survey was conducted in order to establish the proportion of the population which was infected along with cancer. The results indicated that 40 percent of the population

Standard form of a complex number, Standard form of a complex number So...

Standard form of a complex number So, let's start out with some of the basic definitions & terminology for complex numbers. The standard form of a complex number is

Find the value a2 + ß2 and (a - ß)2, If  α,β are the zeros of the polynom...

If  α,β are the zeros of the polynomial 2x 2 - 4x + 5 find the value of a) α 2 + β 2   b) (α - β) 2 . Ans : p (x) = 2 x 2 - 4 x + 5           (Ans: a) -1 , b) -6) α + β =

Solution to a differential equation, A solution to a differential equation ...

A solution to a differential equation at an interval α Illustration 1:   Show that y(x) = x -3/2 is a solution to 4x 2 y′′ + 12xy′ + 3 y = 0 for x > 0. Solution : We'll

Run a chi-square test, Download the data on Gas Mileage.  This is a sample ...

Download the data on Gas Mileage.  This is a sample of 81 passenger cars with information about gas consumption and other technical details.     a.        Estimate the following

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