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

Credit and invoice, mr ouma bought two sets of spanners for sh 300per set ...

mr ouma bought two sets of spanners for sh 300per set two machanic vice at sh 1000each three set of screw driver at sh 115 per set and tool box for sh 300

Determine the mean of the subsequent numbers, Determine the mean of the sub...

Determine the mean of the subsequent numbers: Example: Determine the mean of the subsequent numbers: 5, 7, 1, 3, 4 Solution: where x'          =

Calculate the area of circle, Calculate the area of CIRCLE ? A circle i...

Calculate the area of CIRCLE ? A circle is a set of all points that are at a given distance from a center point. The diameter (d) of a circle is the length of a line that goes

Quantitative Technique in Marketing, a company''s advertising expenditures ...

a company''s advertising expenditures average $5,000 per month. Current sales are $29,000 and the saturation sales level is estimated at $42,000. The sales-response constant is $2,

An amortization, Ahmad borrowed $450000.00 at 3% compounded semi-annually f...

Ahmad borrowed $450000.00 at 3% compounded semi-annually for ten years to buy an apartment. Equal payments are made at the end of every six months. a) Determine the size of the se

#According to the CDC there were 597, Ask question #Minimum 100 words acceA...

Ask question #Minimum 100 words acceAccording to the CDC there were 597,689 deaths in the US in 2010 attributed to heart disease. a) Given That the US population in 2010 was clos

Determine the direction cosines and direction angles, Determine or find out...

Determine or find out the direction cosines and direction angles for a = (2, 1, -4) Solution We will require the magnitude of the vector. ||a|| = √ (4+1+16) = √ (21)

Geometric mean-geometric progression, Geometric mean - It is a measure ...

Geometric mean - It is a measure of central tendency normally utilized to measure industrial increases rates. - It is explained as the nth root of the product of 'n' observa

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