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

probability that they are both the same color, Consider two bags, A and B,...

Consider two bags, A and B, with the following contents a)    A single marble is drawn from each bag. What is the probability of getting a white marble out of Bag A and a red marb

Loan amortisation problem, On 30 June 2012 Bill purchase a home by taking o...

On 30 June 2012 Bill purchase a home by taking out a 30 year mortgage of $600,000 at 6% interest per annum, compounded months. Repayments are made at the end of each month. (a) Cal

Calculate log equation, Calculate log equation: Calculate log 10 2 - ...

Calculate log equation: Calculate log 10 2 - log 10 3. Solution: Rule 2. log 10   (A/B): log 10   A - log 10   B log 10   2 - log 10   3 = log 10   (2/3) =

Negative three and positive eight inclusive represent y, The value of y is ...

The value of y is among negative three and positive eight inclusive. Which of the subsequent represents y? This inequality displays a solution set where y is greater than or eq

Determine the volume of the object, A rectangular container is 15 cm wide a...

A rectangular container is 15 cm wide and 5 cm long, and contains water to a depth of 8 cm. An object is placed in the water and the water rises 2.3 cm. Determine the volume of the

Mean roots, Find all the eighth roots of (19 + 7 i)

Find all the eighth roots of (19 + 7 i)

Forecasting by using least squares, Forecasting By Using Least Squares ...

Forecasting By Using Least Squares Data have been kept of sales over the last seven years Year 1 2 3 4 5 6

Can u please tell me how to solve, a triangle with side lengths in the rati...

a triangle with side lengths in the ratio 3:4:5 is inscribed in a circle

How far did the ?rst arrow goes, From a fixed point directly in front of th...

From a fixed point directly in front of the center of a bull's eye, Kim aims two arrows at the bull's eye. The first arrow nicks one point on the edge of the bull's eye; the second

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