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

Prove that xa+ar=xb+br of circle, In figure, XP and XQ are tangents from X ...

In figure, XP and XQ are tangents from X to the circle with centre O. R is a point on the circle. Prove that XA+AR=XB+BR Ans:    Since the length of tangents from externa

Eliminate the parameter from the set of parametric equations, Eliminate the...

Eliminate the parameter from the subsequent set of parametric equations. X = t 2 + t Y = 2t - 1 Solution: One of the very easy ways to eliminate the parameter is to

What is plotting points, What is Plotting Points ? How would you go abo...

What is Plotting Points ? How would you go about drawing the graph of y = x2 ? One way to do it is by plotting points. (Your graphing calculator uses this method.) This is

Marketing plan and its parts, can you offer help with an entry level market...

can you offer help with an entry level marketing class and with developing charts and tables for the final marketing plan?

Coordinate geometry, find the points on y axis whose distances from the poi...

find the points on y axis whose distances from the points A(6,7) and B(4,-3) are in the ratio 1:2

Problem, a mixture of 40 liters of milk and water contains 10% water.how mu...

a mixture of 40 liters of milk and water contains 10% water.how much water should be added to this so that water my be 20% in the new mixture

Rational numbers, Although the set of integers caters to a larger aud...

Although the set of integers caters to a larger audience, it is inadequate. This inadequacy has led to the formulation of Rational numbers. Rational numbers are of

Velocity and acceleration - three dimensional space, Velocity and Accelerat...

Velocity and Acceleration - Three Dimensional Space In this part we need to take a look at the velocity and acceleration of a moving object.    From Calculus I we are famili

Evaluate trig functions limits, Evaluate following limits. (a) (...

Evaluate following limits. (a) (b)    Solution There in fact isn't a whole lot to this limit. In this case because there is only a 6 in the denominator we'l

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