Suppose you have the following indirect utility function:V(px, Py, I) = In (PxPyWhat are marshallian demands for x and y?O(gx, gy) = (2p, 2p,2px' 2pyO(8x, 8y) = (In, In )2px2pyIO(gx, gy) = (exp(2p.Py), exp( 2p.P,))2pxPy%DO(8x» 8y) = (%3D2p, +P,' Px+2p,What is the expenditure function for the associated expenditure minimization problem?OE(px, Py, U) = (px + Py) In(U)%3DOE(px, Py, U) = Vexp(U)PxPy%3DOE(Px, Py, U) = (p + p3) In(U)%3DOE(Px, Py, U) = exp(U) PxPy%3D

Utility refers to the amount of satisfaction a person gets from the consumption of goods and…

Suppose you have the following indirect utility function: V (Px» Py, I) = In PxPy %3D What are marshallian demands for x and y? O(8x, 8y) = (: %3D 2px 2py 1 O(gx, 8y) = (In 2py 2px O(gx, gy) = (exp(2p.Py -), exp(2p.Py O(gx»8y) = (; 2p, +P, Px+2py What is the expenditure function for the associated expenditure minimization problem? OE(Px, Py, U) = (px + Py) In(U) OE(Px, Py, U) = Vexp(U)PxPy %3D OE(Px, Py, U) = (pi + p3) In(U) OE(P. Py U) = exp(U)p.Py

Suppose you have the following indirect utility function: V (Px» Py, I) = In PxPy %3D What are marshallian demands for x and y? O(8x, 8y) = (: %3D 2px 2py 1 O(gx, 8y) = (In 2py 2px O(gx, gy) = (exp(2p.Py -), exp(2p.Py O(gx»8y) = (; 2p, +P, Px+2py What is the expenditure function for the associated expenditure minimization problem? OE(Px, Py, U) = (px + Py) In(U) OE(Px, Py, U) = Vexp(U)PxPy %3D OE(Px, Py, U) = (pi + p3) In(U) OE(P. Py U) = exp(U)p.Py

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Suppose you have the following indirect utility function:
V(px, Py, I) = In (
PxPy
What are marshallian demands for x and y?
O(gx, gy) = (2p, 2p,
2px' 2py
O(8x, 8y) = (In
, In )
2px
2py
I
O(gx, gy) = (exp(2p.Py
), exp( 2p.P,
))
2pxPy
%D
O(8x» 8y) = (
%3D
2p, +P,' Px+2p,
What is the expenditure function for the associated expenditure minimization problem?
OE(px, Py, U) = (px + Py) In(U)
%3D
OE(px, Py, U) = Vexp(U)PxPy
%3D
OE(Px, Py, U) = (p + p3) In(U)
%3D
OE(Px, Py, U) = exp(U) PxPy
%3D

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