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

Net Present Value, A business has the opportunity to expand by purchasing ...

A business has the opportunity to expand by purchasing a machine at a cost of £80,000. The machine has an estimated life of 5 years and is projected to generate a cashflow of £20,0

Power of x, (x+1/x)^2=3 then value of x^72+x^66+x^54+x^36+x^24+x^6+1 is

(x+1/x)^2=3 then value of x^72+x^66+x^54+x^36+x^24+x^6+1 is

The dimensions are 2x and 4x what is area of sara''s bedroom, Sara's bedroo...

Sara's bedroom is within the shape of a rectangle. The dimensions are 2x and 4x + 5. What is the area of Sara's bedroom? Because the area of a rectangle is A = length times wid

Quartic polynomial, Question: Let f be a quartic polynomial (ie. a poly...

Question: Let f be a quartic polynomial (ie. a polynomial of degree 4). Suppose that f has zeros at -2; 1; 3; 4 and that f(0) = 4. Sketch a graph of f. If f(x) is

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

College Algebra, Find the center and radius of the circle whose equation is...

Find the center and radius of the circle whose equation is 3 x^2 - 8 x+ 3 y^2+ 4 y+ 2 = 0

Differentiate outline function in chain rules, Differentiate following. ...

Differentiate following. Solution : It requires the product rule & each derivative in the product rule will need a chain rule application as well. T ′ ( x ) =1/1+(2x) 2

Solid geomerty, find the equation to the sphere through the circle xsqaure+...

find the equation to the sphere through the circle xsqaure+ysquare+zsquare+=9 , 2x+3y+4z=5

Decision theory, DECISION THEORY People constantly make decision...

DECISION THEORY People constantly make decisions in their private lives as well as in their work. Some decisions are qualitative in terms of their implications and signi

Easy math margin percentage increase, If A = 100 and B = 44 then A1 =...

If A = 100 and B = 44 then A1 = 120 and B2 = 52.80 A is MAP and B is Tier 6. I need help to find a simple equation that I just cannot find. I just need the percentage

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