Find Alonso's Marshallian demands and indirect utility function gc (Pc, Pp, I) gc (Pc, Pp, I) gc (Pc, Pp, I) = = = gc (Pc, Pp, I) = I 2pcPp Ipp 2pc I 2pp I 2pc 9 9 2 gp (Pc, Pp, 1) = gp (Pc, Pp, I) gp (Pc, Pp, I) - = gp (Pc, Pp, I) = I 2pppc Ipc 2pp I 2pc I 2pp and V(Pc, Pp, I): = and V(Pc, Pp, I) and V (Pc, Pp, I): = and V (Pc, Pp, I) : 41² PcPp [² PcPp 21² PcPp [² PcPp

Find Alonso's Marshallian demands and indirect utility function gc (Pc, Pp, I) gc (Pc, Pp, I) gc (Pc, Pp, I) = = = gc (Pc, Pp, I) = I 2pcPp Ipp 2pc I 2pp I 2pc 9 9 2 gp (Pc, Pp, 1) = gp (Pc, Pp, I) gp (Pc, Pp, I) - = gp (Pc, Pp, I) = I 2pppc Ipc 2pp I 2pc I 2pp and V(Pc, Pp, I): = and V(Pc, Pp, I) and V (Pc, Pp, I): = and V (Pc, Pp, I) : 41² PcPp [² PcPp 21² PcPp [² PcPp

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider the following indirect utility function: v(p, w) = w2 /4p1p2 How can we recover the direct utility function (u(x))?
Hello, I am not understanding this practice problem. I dont know how to solve the second half .
Consider the following indirect utility function: V(p,I) = II,( Pi where E-1 a; = 1, and a; + 0 , Vi 1. What's the demand function for x;? (Hint: Take logarithm to both sides of the equation) 2. What's the original utility function? (Hint: If n is too abstract, let n = = 2)
Zeynep is at the supermarket buying her bi-weekly groceries. As she arrived at the store right before closing, not much is left on the shelves; so her purchases are limited to beef, B, and an assortment of organic vegetables, V. Beef costs £50/kg and vegetables Ł10/kg. Her utility function is expressed as U(B,V) = B0-6v0.3. She has ±150 to spend. Please answer the following questions using this information: A) Given the vegetables cost less than beef, explain why Zeynep would not only buy vegetables. B) Write Zeynep's constrained maximization problem (objective function subject to her budget constraint). C) Using the Lagrangian technique, find how much beef and vegetables would Zeynep buy? D) Show that for the preferences represented as above, demand for beef is a function of only its own price, pg, and income, m, but not the price of vegetables, py. Note: Rather than using the given prices and income, use PB, Py and m. Find and comment on the comparative statics, i.e., how do changes…
Using the homogeneity of indirect utility, which of the following cannot be an indirect utility function? (a) V: = (b) V: = (c) V: = [2 PzPy I Pz+Py p²+p² (d) V = 1 Pz
Find the expenditure function corresponding to utility function u(x₁,x₂) = ln(x₁ +a)+ln(x₂+b). a.e(p₁u) = 2√P₁P₂)eu/2 b.e(p,u)=e¹(√P₁P₂)+ap₁ + bp₂ Ⓒc. e(p₁u) = 2(√P₁P₂)eu/2-ap₁-bp₂ d.elpu)=e"√√P₁P₂
A consumer has preferences on Amazon original shows (x), and the composite good (y) described as u(x,y) = x2y (HINT: MUx = 2xy and MUy = x2) and she has I = $300 budget in total. Assume pY = $1, so we can think of y as the saved dollars in her pocket for other uses. Now, if she is not an amazon prime member, each show costs pX = $10, but if she is a prime member, then pX = $4. Amazon prime membership costs $120. (a) Draw her feasible budget set on the x-y axis for the no-prime-membership case, and the prime-membership case, separately. (b) If she chooses not to be a prime member, what is her optimal bundle (x,y) ?(c) If she chooses to become a prime member, what is her optimal bundle (x,y) ?(d) What is her optimal utility in (b)?in (c)? Would she want to become a prime member?
Questions d) to f)
14.3 (0) Quasimodo consumes earplugs and other things. His utility function for earplugs x and money to spend on other goods y is given by u(x, y) = 100x x² +y. 2
Solve the following utility maximization problem, max u (x1, x2) subject to Pix1 + p2x2 = I meaning find x (P1, P2, I) and x (p1, p2, I) and u* (p1, p2, I) = V * . In solving this optimization problem, assume the following functional form for the direct utility function, и (х1, X2) —а: · In(x1) + b· In(x2) where a and b are just parameters (i.e., representations of single numerical values). Assume that the Second-Order Conditions for a constrained maximum hold. Write clearly and show your work!
Imagine Billy eats brownies (B) and cookies (C) and considers them to be perfect substitutes. Brownies yield him four times more utility than cookies. Which of the following equations could describe his utility function? U= 0.25B + C O U=B+ 0.25C U = B'C OU = BC4 %3D
Two friends, Minrui and Jing, share a flat and both consume internet (i) and all other goods (g). The utility function for Minrui is U_m=i^(0.3)g^(0.7) whereas the utility function for Jing is U_m=i^(0.1)g^(0.9). Considering that the income of both individuals are the same $500 and that the prices are p_i = $80 and p_g = $5, what would be the optimal allocation of public good (i) and private good (g)? Interpret your answer.