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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a. Find the consumer's Hicksian (compensated) and Marshallian (uncompensated) demand
functions.
b. If M = 100, Px
what is his resulting utility
c. Now the price of apple rises to Px
as before. What quantities (X and Y) does the consumer buy and what is his resulting
utility?
1 and P = 1, what quantities of X and Y does the consumer buy, and
%3D
1.1, while income and the price of banana are the same
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 = AX,.5X?
b. Y = 0.5X, + 10
c. Y = AX,X2
d. Y = 3X1 + 7X2
e. Y = (-AX{ – BX? + CX,X2)05
Question 6
A firm employs a Cobb-Douglas production function of the form Y = K0.4L04. The output price
is P and the input prices are r and w for K and L, respectively.
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
c. Derive the firm's profit function
Transcribed Image Text:a. Find the consumer's Hicksian (compensated) and Marshallian (uncompensated) demand functions. b. If M = 100, Px what is his resulting utility c. Now the price of apple rises to Px as before. What quantities (X and Y) does the consumer buy and what is his resulting utility? 1 and P = 1, what quantities of X and Y does the consumer buy, and %3D 1.1, while income and the price of banana are the same 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 = AX,.5X? b. Y = 0.5X, + 10 c. Y = AX,X2 d. Y = 3X1 + 7X2 e. Y = (-AX{ – BX? + CX,X2)05 Question 6 A firm employs a Cobb-Douglas production function of the form Y = K0.4L04. The output price is P and the input prices are r and w for K and L, respectively. 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 c. Derive the firm's profit function
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