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

Consider an upstream firm in russia that mines iron, Consider an upstream f...

Consider an upstream firm in Russia that mines iron ore at a total cost of $15 q , where q is the number of tons of ore. This upstream firm then ships ore to Germany for processi

Market supply labour, use a graphical illustration to describe briefly what...

use a graphical illustration to describe briefly what the influence of each of the following be on the market supply of labour,(a) an increase in immigrants, (b) a reduction in wag

Frictional and cyclical unemployment, Frictional and Cyclical Unemployment:...

Frictional and Cyclical Unemployment: Frictional Unemployment: It refers to unemployment caused by changes in individual labour markets. This is the type of unemploymen

Concept of efficiency, The Concept of Efficiency is stated below: To il...

The Concept of Efficiency is stated below: To illustrate this concept of the efficiency, it is used to expand the understanding of what is meant by the Pareto-efficient allocat

Price Elasticity of supply, Explain the difference between elastic and fixe...

Explain the difference between elastic and fixed supply

Positive versus normative economics, Positive versus Normative Economics ...

Positive versus Normative Economics Positive Economics Positive economics considers with the predictions or observations of the particulars of economic life. For instance:

The cost of production, crumble corporation produce biscuits. here the rela...

crumble corporation produce biscuits. here the relation between the number of workers and output

Statistical or analytical methods of demand forecasting, Statistical metho...

Statistical methods are considered to be superior techniques of demand estimation because: a. The element of subjectivity in this method is minimum, b. Methods of es

Estimating occupational structure, Estimating Occupational Structure of the...

Estimating Occupational Structure of the Labour Force within Economic Sectors in the Target Year The total output in the economy, the sectoral shares therein and labour produc

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