Consider a utility maximizing consumer who generates utility according to the following utility function: U=In(k)+s where k is the quantity of masks consumed and s is the quantity of hand sanitizer consumed. Let the price of k, the price of s, and income be noted as Pk Ps, and M, respectively. * Set up the utility maximizing Lagrangian and derive the Marshallian demand functions. What is the quantity demand of k and s if income = $120 pk = $2 and ps = $12? Derive the indirect utility function and the expenditure function. Use Shephard's Lemma to derive the compensated (Hicksian) demand curves.

Consider a utility maximizing consumer who generates utility according to the following utility function: U=In(k)+s where k is the quantity of masks consumed and s is the quantity of hand sanitizer consumed. Let the price of k, the price of s, and income be noted as Pk Ps, and M, respectively. * Set up the utility maximizing Lagrangian and derive the Marshallian demand functions. What is the quantity demand of k and s if income = $120 pk = $2 and ps = $12? Derive the indirect utility function and the expenditure function. Use Shephard's Lemma to derive the compensated (Hicksian) demand curves.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a utility maximizing consumer who generates utility according to the
following utility function: U=In(k)+s where k is the quantity of masks
consumed and s is the quantity of hand sanitizer consumed. Let the price of k, the
price of s, and income be noted as pk Ps, and M, respectively.
Set up the utility maximizing Lagrangian and derive the Marshallian
demand functions. What is the quantity demand of k and s if income =
$120 pk = $2 and ps = $12?
Derive the indirect utility function and the expenditure function.
Use Shephard's Lemma to derive the compensated (Hicksian) demand
curves.
What is the money metric utility function in this case.

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