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

Functions, find the domain of the function f(x) = (| sin inverse sin x | - ...

find the domain of the function f(x) = (| sin inverse sin x | - cos inverse cos x) ^ 1/2

Holistic marketing , Necessity of holistic marketing or importance of holis...

Necessity of holistic marketing or importance of holistic marketing

Hello, dans chaque cas recris l expression sous la forme d un rappot reduit...

dans chaque cas recris l expression sous la forme d un rappot reduit 5kg/600g

If 967.234 is divided by 10 how will the decimal point move, If 967.234 is ...

If 967.234 is divided by 10, how will the decimal point move? It will move one place to the left. While dividing by multiples of 10, the decimal point is moved to the left acco

Testing the hypothesis equality of two variances, Testing the hypothesis eq...

Testing the hypothesis equality of two variances The test for equality of two population variances is based upon the variances in two independently chosen random samples drawn

Give the introduction about graphing, Give the  introduction about Graphin...

Give the  introduction about Graphing? Somebody tells you that x = 5 and y = 3. "What does it all mean?!" you shout. Well here's a picture: This picture is what's call

CIECLE, HOW TO DRAW A TANGENT SEGMENTS TO A CIRCLE WHEN CENTRE IS NOT KNOWN...

HOW TO DRAW A TANGENT SEGMENTS TO A CIRCLE WHEN CENTRE IS NOT KNOWN?

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