Question

Given : U(x, , x.)=x,x, + a) Calculate the Marshallian demand for x and x2 b) Graph the demand for x when P2-20 and I 100. c) Show how the graph changes when P,-5.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

PAGE No. : . DATE: I m v 2. クし 2 2. 2i-- って2 + i Let Perices be Pat 2 Pi2 z2 221 2 PoetPAGE No. :- DATE: 2. 20 2 229 12 2- 2 PPLİPAGE No.: DATE: I 12 OWhen P2=10,X2=4.5 and when P2=2,X2=9.5

0 Coplease leave a comment if you are not satisfied with the answer or have any doubt.

Add a comment
Know the answer?
Add Answer to:
Given : U(x, , x.)=x,x, + a) Calculate the Marshallian demand for x and x2 b)...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Please be thorough, this question has been posted a few times and I cant seem to...

    Please be thorough, this question has been posted a few times and I cant seem to follow the work for parts a and b. Given: U(x1,x2) = x;x2 + x; a) Calculate the Marshallian demand for x, and x2. b) Graph the demand for x, when P = 20 and I = 100. c) Show how the graph changes when P2 = 5.

  •    1) Optimization problem 1 Max U(x, y) = x1^0.5 + x2^0.5 s.t. x1 + x2...

       1) Optimization problem 1 Max U(x, y) = x1^0.5 + x2^0.5 s.t. x1 + x2 =16 Find the optimum bundle; check if there is a minimum or a maximum. 2) Give the interpretation of the expenditure function, explain and show its properties. Draw the diagram of the expenditure function. Derive the compensated demand function for x1 and x2 E( p, u) = p(p1. p2)^0,5 and the uncompensated demand function. 3) Derive the expenditure function when the direct utility function...

  • 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)?

  • 1. (20 points) Mac has utility over x; and x2 given by u(x1, x2) = min...

    1. (20 points) Mac has utility over x; and x2 given by u(x1, x2) = min . If P. = $1. P. = $1. and I = $100. find the value of xı* (Hint: This is Leontief utility, the kind with right-angled indifference curves) 2. (10 points) If P, = $4, P2 = $2, and I = $20, and my utility is given by u(x1, x2) = 4x1 + 3x2, find x* (Note: I'm asking for optimal consumption of Good...

  • 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...

  • The utility function is u = x1½ + x2, and the budget constraint is m =...

    The utility function is u = x1½ + x2, and the budget constraint is m = p1x1 + p2x2. Derive the optimal demand curve for good 1, x1(p1, p2), and good 2, x2(m, p1, p2). Looking at the cross price effects (∂x1/∂p2 and ∂x2/∂p1) are goods x1 and x2 substitutes or complements? Looking at income effects (∂x1/∂m and ∂x2/∂m) are goods x1 and x2 inferior, normal or neither? Assume m=100, p1=0.5 and p2=1. Using the demand function you derived in...

  • Q1. Sam consumes two goods x1 and x2. Her utility function can be written as U(x1,x2)=x...

    Q1. Sam consumes two goods x1 and x2. Her utility function can be written as U(x1,x2)=x 1raised to 2/3 and x 2 raised to 1/5 ⁄. Suppose the price of good x1 is P1, and the price of good x2 is P2. Sam’s income is m. [20 marks] a) [10 marks] Derive Sam’s Marshallian demand for each good. b) [5 marks] Derive her expenditure function using indirect utility function. c) [5 marks] Use part c) to calculate Hicksian demand function...

  • 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...

  • pts) Let U(X,Y,Z) = Xayb z a,b,c > 0 Find the Marshallian demand functions. Calculate og...

    pts) Let U(X,Y,Z) = Xayb z a,b,c > 0 Find the Marshallian demand functions. Calculate og opp om and Interpret the results of these partial derivatives. Interpret | Check the second order conditions.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT