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

Surds and logarithms, what are these all about and could i have some exampl...

what are these all about and could i have some examples of them please

Produce list containing m-vectors delta and lambda, The logarithm of the Po...

The logarithm of the Poisson mixture likelihood (3.10) can be calculated with the following R code: sum(log(outer(x,lambda,dpois) %*% delta)), where delta and lambda are m-ve

Probability: determine the optimal strategy , On a picnic outing, 2 two-pe...

On a picnic outing, 2 two-person teams are playing hide-and-seek. There are four  hiding locations (A, B, C, and D), and the two members of the hiding team can hide separately in a

Time table, tips to memorize my time table

tips to memorize my time table

Numeration, which of these is between 5,945,089 and 5,956,108

which of these is between 5,945,089 and 5,956,108

Linear Programming, #question.A manufacturer produces two items, bookcases ...

#question.A manufacturer produces two items, bookcases and library tables. Each item requires processing in each of two departments. Department 1 has 40 hours available and departm

Determine the poisson probability distribution, A manufacturer assures his ...

A manufacturer assures his customers that the probability of having defective item is as 0.005. A sample of 1000 items was inspected. Determine the probabilities of having the give

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