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

Effected labor markets, If a minimum wage were imposed below the competitiv...

If a minimum wage were imposed below the competitive equilibrium what would we expect to observe in the effected labor markets?

Economics, Economics- Definition Economics is the study of how societie...

Economics- Definition Economics is the study of how societies utilize limited resources to make valuable commodities and allocate them among diverse people. Microeconomics h

Economic growth and economic development, Economic growth and Economic deve...

Economic growth and Economic development: Economic Growth refers to an increase in real aggregate output (real GDP) reflected in increased real per capita income.A country is

A potato chip industry, run a s monopoly how will this benefit stakeholders...

run a s monopoly how will this benefit stakeholders involved, such as the goverment, businesses, and consumers?

Fresnel approximation of a spherical wave, Show that when a plane wave is t...

Show that when a plane wave is transmitted through a thin lens of focal length f in the direction parallel to the optical axis of the lens, its converted into a paraboloid wave (th

Financial securities, Securitization: A process in that financial relations...

Securitization: A process in that financial relationships (like loans) are converted into financial securities or assets (like bonds) that can be bought and re-sold in securities m

Demand function for product, 2. You are examining the effects of a specific...

2. You are examining the effects of a specific tax of 10 cents imposed on the sales of a product that we shall call XYZ. To carry out your analysis, assume that the market is a per

Explain about the specification of economics environments, Explain about th...

Explain about the specification of economics environments. Specification of Economic Environments: The primary step for studying an economic issue is to identify the econom

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