Find the consumer's Hicksian (compensated) and Marshallian (uncompensated) demand functions. а. b. If M = 100, Pz = 1 and Px = 1, what quantities of X and Y does the consumer buy, and what is his resulting utility c. Now the price of apple rises to Px = 1.1, while income and the price of banana are the same as before. What quantities (X and Y) does the consumer buy and what is his resulting utility? Question 5 Which of the following production functions exhibit increasing return to scale? Decreasing return to scale? Constant return to scale? Note: X, and X2 are inputs a. Y = AX95X3 b. Y = 0.5X, + 10 c. Y = AX,X2 d. Y = 3X, + 7X2 e. Y = (-AX? – BX? + CX,X2)05 Question 6 A firm employs a Cobb-Douglas production function of the form Y = is P and the input prices are r and w for K and L, respectively. KO4 L0.4. The output price a. Set up the firm's profit maximization problem and find the input demands for K and L b. Derive the firm's output supply function Derive the firm's profit function с.

Find the consumer's Hicksian (compensated) and Marshallian (uncompensated) demand functions. а. b. If M = 100, Pz = 1 and Px = 1, what quantities of X and Y does the consumer buy, and what is his resulting utility c. Now the price of apple rises to Px = 1.1, while income and the price of banana are the same as before. What quantities (X and Y) does the consumer buy and what is his resulting utility? Question 5 Which of the following production functions exhibit increasing return to scale? Decreasing return to scale? Constant return to scale? Note: X, and X2 are inputs a. Y = AX95X3 b. Y = 0.5X, + 10 c. Y = AX,X2 d. Y = 3X, + 7X2 e. Y = (-AX? – BX? + CX,X2)05 Question 6 A firm employs a Cobb-Douglas production function of the form Y = is P and the input prices are r and w for K and L, respectively. KO4 L0.4. The output price a. Set up the firm's profit maximization problem and find the input demands for K and L b. Derive the firm's output supply function Derive the firm's profit function с.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter3: Preferences And Utility

Section: Chapter Questions

Problem 3.7P

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