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

Supply, concept of supply and the factors that affect the supply

concept of supply and the factors that affect the supply

Economic models, what is the use of models in economics?

what is the use of models in economics?

Reasons for development planning, Reasons for development planning: To...

Reasons for development planning: To maximize the utilization of economic resources: The resources of any nation are not always enough for her use. In this wise, resources mus

Supply schedule, How to find quantity supplied given just the price

How to find quantity supplied given just the price

Government policy business cycle, Government Policy Business Cycle Busi...

Government Policy Business Cycle Business cycles create instability in the economy. The period of boom or rising business activities is characterised by increase in output, emp

Aggregate demand and supply , using the aggregate demand and supply model (...

using the aggregate demand and supply model (x axis is national output and y axis is price level) if an economy is in a state of disequilibrium where supply is excess of demand u

Volume of trade, Volume of Trade: It relates to the size of internatio...

Volume of Trade: It relates to the size of international transactions. Since a large number of commodities enter in international transactions and their aggregate can be found

Uses of national income statistics, Uses of national income statistics: ...

Uses of national income statistics: - It helps to organize economic data and activities. - It helps to classify economic activities into various segments or sectors. - It he

Molarity, i have 40cm3 of hcl of 1 molarity i want to dilute it to 0.2m can...

i have 40cm3 of hcl of 1 molarity i want to dilute it to 0.2m can yo please help

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