What is hicksian demand function, Microeconomics

Assignment Help:

What is Hicksian demand function?

Hicksian Demand Function:

The solution of expenditure function that is the function of (p, u) is denoted by h(p, u) and termed as the Hicksian demand function. This demand function tells us what consumption bundle attains a target level of utility and minimizes total expenditure. This function is sometimes termed as a compensated demand function. That terminology comes from seeing the demand function as being constructed through varying prices and income in order to keep the consumer at a fixed level of utility. Therefore, the income changes are arranged to “compensate” for the price variations. Hicksian demand functions are not directly observable from they depend onto utility that is not directly observable.

Demand functions defined as a function of prices and income are observable; while we want to emphasize the dissimilarity between the Hicksian demand function and the common demand function.


Related Discussions:- What is hicksian demand function

Arbitration, Arbitration The use of a third party to describe between ...

Arbitration The use of a third party to describe between two sides dead locked in a negotiation. The arbitrator's decision can be binding or not binding, as before agreed upon

Macroeconomics, Consider the following: The city council has just approved ...

Consider the following: The city council has just approved the construction of a water park in your town. You are responsible for studying the impact of the new water park on the l

Is the natural rate of unemployment includes frictional, Is the natural rat...

Is the natural rate of unemployment includes frictional, structural & seasonal unemployment?  The natural rate of unemployment contains frictional, structural & seasonal unempl

Explanation of the break in trend, Explanation of the Break in Trend: ...

Explanation of the Break in Trend: An economy can grow in three different ways or all three ways may work simultaneously:   1)  Horizontally, i.e., it may go on producing m

Data manipulation, Data were taken with a Data Acquisition System (DAQ) and...

Data were taken with a Data Acquisition System (DAQ) and stored in the data file 'data.txt'. 'data.txt' is a text file with 3 columns containing the following data: Column 1: Ti

Time serie, uses of time series in indian economy

uses of time series in indian economy

integrated programme in management, 1. Suppose we observe that the price o...

1. Suppose we observe that the price of soyabeans goes up while the quantity of soyabeans sold goes up as well. Use the supply and demand curves to illustrate two possible explanat

Elasticity of demand, elasticity of demand for demand function Q=10-2p for ...

elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

What is endothermic reaction, What is endothermic reaction? 3. Draw a gener...

What is endothermic reaction? 3. Draw a generalised energy graph for an endothermic reaction.

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