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

Example of line - common polar coordinate graphs, Example of line - Common ...

Example of line - Common Polar Coordinate Graphs Example:  Graph θ = 3Π, r cos θ = 4 and r sin θ = -3 on similar axis system. Solution There actually isn't too much to

Show that 571 is a prime number, Show that 571 is a prime number. Ans: ...

Show that 571 is a prime number. Ans:    Let x=571⇒√x=√571 Now 571 lies between the perfect squares of  (23)2 and (24)2 Prime numbers less than 24 are 2,3,5,7,11,13,17,1

Positive integer, (a)   Specify that  the sum of  the degrees  of all verti...

(a)   Specify that  the sum of  the degrees  of all vertices of a graph  is double the number of edges  in  the graph.                            (b)  Let G be a non directed gra

Poisson mathematical properties, Poisson Mathematical Properties 1. Th...

Poisson Mathematical Properties 1. The expected or mean value = np = λ Whereas; n = Sample Size p = Probability of success 2. The variance = np = ? 3. Standard dev

Geometric , a part of a line with two end points.

a part of a line with two end points.

Minima, Minima, Maxima and points of inflexion a)      Test for rela...

Minima, Maxima and points of inflexion a)      Test for relative maximum Consider the given function of x whose graph is presented by the figure given below

Quadric surfaces - three dimensional spaces, Quadric Surfaces Earlier w...

Quadric Surfaces Earlier we have looked at lines and planes in three dimensions (or R 3 ) and when these are used fairly heavily at times in a Calculus class there are several

Variance, Variance Consider the example of investment opportunities. Th...

Variance Consider the example of investment opportunities. The expected gains were Rs.114 and Rs.81 respectively. The fact is that an investor also looks at the dispersion befo

Example of factoring quadratic polynomials, Factor following polynomials. ...

Factor following polynomials.                               x 2 + 2x -15 Solution x 2 +2x -15 Okay since the first term is x 2 we know that the factoring has to ta

Numerical methods for ordinary differential equationsordinay, #k1=f(Tn, Xn)...

#k1=f(Tn, Xn), k2=f (Tn + H.Y,Xn + H.Y.k1) Xn+1=Xn + H(a.k1+ b.k2) Find a relation between Y,a and b so that the method is second order consistent.

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