U(x, y) = x1ax2(1-a) a. Solve for the marshallian demands for x1 and x2, as functions...
U(x, y) = x1ax2(1-a)
a. Solve for the marshallian demands for x1 and x2, as functions of p1, p2, and m. (Hint: your solutions will be equations, not numbers).
b. For x1 find the own-price elasticity and income elasticity.
c. Suppose a = 0.2, m = 100, p1 = 2, and p2=8, find the quantities of x1 and x2.
d. happens to these quantities when p1 doubles to $4?
e. What does this say about the price consumption curve (PCC)?
Homework Answers
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U(x, y) = x1ax2(1-a)
a. Solve for the marshallian demands for x1 and x2, as
functions...
U(x, y) = x1ax2(1-a) Solve for the marshallian demands for x1 and x2, as functions of...
U(x, y) = x1ax2(1-a) Solve for the marshallian demands for x1 and x2, as functions of p1, p2, and m. (Hint: your solutions will be equations, not numbers). For x1 find the own-price elasticity and income elasticity. Suppose a = 0.2, m = 100, p1 = 2, and p2=8, find the quantities of x1 and x2. What happens to these quantities when p1 doubles to $4? What does this say about the price consumption curve (PCC)? 2. Suppose the price...
NEED Question #2 1. U(x, y) = x1ax2(1-a) a. Solve for the marshallian demands for x1...
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U(x, y) = x,"x:(1-2) a. Solve for the marshallian demands for x, and x, as functions...
U(x, y) = x,"x:(1-2) a. Solve for the marshallian demands for x, and x, as functions of p1, P2, and m. (Hint your solutions will be equations, not numbers). b. For x, find the own-price elasticity and income elasticity. C. Suppose a = 0.2, m = 100, p1 = 2, and p2=8, find the quantities of x, and X d. What happens to these quantities when p1 doubles to $4? e. What does this say about the price consumption curve...
Show all work please. 1. U(x, y) x,ax,1-a) a. Solve for the marshallian demands for x,...
Show all work please.
1. U(x, y) x,ax,1-a) a. Solve for the marshallian demands for x, and x2, as functions of p1, p2, and m. (Hint: your solutions will be equations, not numbers). (4pts) b. For x, find the own-price elasticity and income elasticity. (4pts) c. Suppose a = d. What happens to these quantities when p1 doubles to $4? (4pts) e. What does this say about the price consumption curve (PCC)? (4pts) 100, p1 2, and p2=8, find the...
1. Suppose U(X1, X2) = 2lnx, + 3lnx, and P, = 4, P2 = 1, and...
1. Suppose U(X1, X2) = 2lnx, + 3lnx, and P, = 4, P2 = 1, and m = 20. (15pts) a. Solve for the Utility maximizing amounts of x, and X2. b. Is this an interior or corner solution? c. Is the budget exhausted here? Yes/no d. Assume that the above prices and income have all doubled. How does this change your solution in a? e. Set up the Lagrangian for this problem (but do not solve it) 2. Suppose...
Q2 For each of the following utility functions, derive the consumer's Marshallian demand functions, 21(P1, P2,...
Q2 For each of the following utility functions, derive the consumer's Marshallian demand functions, 21(P1, P2, B) and x (P1, P2, B), and calculate 11 (income elasticity of good 1), €1 (own-price elasticity of good 1), and €12 (cross-price elasticity). a U(x1, x2) = 21 b U(x1, x2) = 2.925-a for a € (0,1) CU(21, 12) = ln(21) + x2 where B > P2.
The utility function is u = x1½ + x2, and the budget constraint is m =...
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7. Suppose U(X., X) = X.-X, (12pts) a. Solve for the marshallian demands for x, and...
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An individual has the utility function: U(x1,x2,x3) = ln x1 + ln x2 + 0.5ln x3....
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Consider the following utility function, u(x1;x2) = min [sqrt (x1); sqrt(ax2)]; where a > 0 a)Derive the Marshallian demand functions. (Explain your derivation in details.) Does the Marshallian demand increase with price? Are the two consumption goods no
Consider the following utility function, u(x1;x2) = min [sqrt (x1); sqrt(ax2)]; where a > 0 a)Derive the Marshallian demand functions. (Explain your derivation in details.) Does the Marshallian demand increase with price? Are the two consumption goods normal goods? (b)Show two different ways to derive the Hicksian demand functions. Does the Hicksian demand increase with price?
U(x, y) = x,"x:(1-2) a. Solve for the marshallian demands for x, and x, as functions of p1, P2, and m. (Hint your solutions will be equations, not numbers). b. For x, find the own-price elasticity and income elasticity. C. Suppose a = 0.2, m = 100, p1 = 2, and p2=8, find the quantities of x, and X d. What happens to these quantities when p1 doubles to $4? e. What does this say about the price consumption curve...
Show all work please.
1. U(x, y) x,ax,1-a) a. Solve for the marshallian demands for x, and x2, as functions of p1, p2, and m. (Hint: your solutions will be equations, not numbers). (4pts) b. For x, find the own-price elasticity and income elasticity. (4pts) c. Suppose a = d. What happens to these quantities when p1 doubles to $4? (4pts) e. What does this say about the price consumption curve (PCC)? (4pts) 100, p1 2, and p2=8, find the...
1. Suppose U(X1, X2) = 2lnx, + 3lnx, and P, = 4, P2 = 1, and m = 20. (15pts) a. Solve for the Utility maximizing amounts of x, and X2. b. Is this an interior or corner solution? c. Is the budget exhausted here? Yes/no d. Assume that the above prices and income have all doubled. How does this change your solution in a? e. Set up the Lagrangian for this problem (but do not solve it) 2. Suppose...
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