Part 2: Longer Problems 1. Suppose the utility function is U(x, y) = 36x1/2+y, the price of x is the price of y is py. Income is M. The marginal utility of x is MU and for y, MUy = 1. (a) Find the Marshallian Demands for x and y. (b) Find the Hicksian Demands for x and y. (c) Find the expenditure function. (d) Suppose Pa (Ū)? = Px and 18 x1/2 $3, py = $1 and M $120, what is the utility level =

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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Part 2: Longer Problems
1. Suppose the utility function is U(x, y) = 36x1/2+y, the price of x is
the price of y is py. Income is M. The marginal utility of x is MU
and for y, MUy = 1.
(a) Find the Marshallian Demands for x and y.
(b) Find the Hicksian Demands for x and y.
(c) Find the expenditure function.
(d) Suppose Pa
(Ū)?
=
Px and
18
x1/2
$3, py = $1 and M $120, what is the utility level
=
Transcribed Image Text:Part 2: Longer Problems 1. Suppose the utility function is U(x, y) = 36x1/2+y, the price of x is the price of y is py. Income is M. The marginal utility of x is MU and for y, MUy = 1. (a) Find the Marshallian Demands for x and y. (b) Find the Hicksian Demands for x and y. (c) Find the expenditure function. (d) Suppose Pa (Ū)? = Px and 18 x1/2 $3, py = $1 and M $120, what is the utility level =
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