A consumer is faced with the following utility function, U(x1 x2)=(xp1 1+xp2)1/p, where 0<p<1. The consumer also faces the prices p1 and p2 and has income level m. (A) Set up a Lagrangian optimisation function for the consumer and compute the optimal consumption bundle for the consumer
B)the solution in (a) represents the mashallian
C) derive the the corresponding expenditure function for the consumer and the hicksian demand function.
D) using your knowledge on classical demand theory, explain under what circumstances the expenditure minimisation problem and the utility maximization problem would yield the same results.
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