1. For each of the the following utility functions, find the Marshallian demand curves and the Indirect Utility function. a) U(x1,x2)=(ax +(1-α)x) b) U(x1,x2) ax1+ In(x2) Assume alpha and rho are strictly between 0 and 1 2. Let the utility function U(x,y)=x+y+y. The budget constraint is given by pxx+p+y=w. a) Suppose y and are such that 0
1. For each of the the following utility functions, find the Marshallian demand curves and the Indirect Utility function. a) U(x1,x2)=(ax +(1-α)x) b) U(x1,x2) ax1+ In(x2) Assume alpha and rho are strictly between 0 and 1 2. Let the utility function U(x,y)=x+y+y. The budget constraint is given by pxx+p+y=w. a) Suppose y and are such that 0
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.8P
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not use ai please
Transcribed Image Text:1. For each of the the following utility functions, find the Marshallian demand curves and the
Indirect Utility function.
a)
U(x1,x2)=(ax +(1-α)x)
b)
U(x1,x2) ax1+ In(x2)
Assume alpha and rho are strictly between 0 and 1
2. Let the utility function U(x,y)=x+y+y. The budget constraint is given by pxx+p+y=w.
a)
Suppose y and are such that 0<y,6 <1. Is U(x,y) concave?
b)
Given the conditions in part (a), is a corner solution possible, that is can x* = 0 or y* =
0?
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