If Hicksian demand function hi(p, ubar) > 0, then hi(p,ubar) is strictly decreasing in Pi.

Expert Solution

This statement is true.

The Hicksian demand for "good i "is decreasing in "pi".

When the p1 increases the relatuve prices will favoured to good 2. To attain target utility is less of good 1 and more of good2.when p1 rises the relative prices become tilted in favour of good 2.

Raise in p1 always reduces Hicksian demand for good i, for giffen goods it increase the Marshallian demand. Any change in hicksian demand isolates the substitution effect.

Rahul Sunny answered 3 years ago

What is the relationship between the expenditure function and the Hicksian demand function?

Show that there is a continuous, strictly increasing function on the interval [0, 1] that maps...

Show that there is a continuous, strictly increasing function on the interval [0, 1] that maps a set of positive measure onto a set of measure zero. (Use the Cantor set and the Cantor-Lebesgue Function)

Section I: Derivation of Hicksian Demand Curve Joyce’s utility function is as follows: U= 10X3Y2 Where,...

Section I: Derivation of Hicksian Demand Curve Joyce’s utility function is as follows: U= 10X3Y2 Where, X, is the quantity of good X consumed, Y, is the quantity of good Y consumed and, U, is Joyce’s utility function. The general budget constraint for the two goods is a follow: B= PXX + PYY Derive Joyce’s Marshallian demand equation for good X. Also compute her demand for good X when B= 500, and the price of good X is 1 and...

The demand function for iPhone is Q(p) = 100 – P and the cost function is...

The demand function for iPhone is Q(p) = 100 – P and the cost function is C(Q) = 5Q. Apple initially sets the price of iPhone to be p1; after one-year Apple lowers the price to p2. Suppose the price decrease is not anticipated by the consumers. The number of consumers buying the iPhone at p1 is q1, and the amount buying at p2 is q2, where q1=Q(p1) and q1+q2=Q(p2). Find the profit-maximizing p1 and p2 and the corresponding q1...

a. Suppose the demand function P = 10 - Q, and the supply function is: P...

a. Suppose the demand function P = 10 - Q, and the supply function is: P = Q, where P is price and Q is quantity. Calculate the equilibrium price and quantity. b. Suppose government imposes per unit tax of $2 on consumers. The new demand function becomes: P = 8 – Q, while the supply function remains: P = Q. Calculate the new equilibrium price and quantity. c. Based on (b), calculate the consumer surplus, producer surplus, tax revenue,...

Suppose the demand function P = 10 - Q, and the supply function is: P =...

Suppose the demand function P = 10 - Q, and the supply function is: P = Q, where P is price and Q is quantity. Calculate the equilibrium price and quantity. b.Suppose government imposes per unit tax of $2 on consumers. The new demand function becomes: P = 8 – Q, while the supply function remains: P = Q. Calculate the new equilibrium price and quantity. c.Based on (b), calculate the consumer surplus, producer surplus, tax revenue and the deadweight...

For a Monopolist, the inverse demand function is P=80 – Q (Or, the Demand function is...

For a Monopolist, the inverse demand function is P=80 – Q (Or, the Demand function is Q = 80 – P, if you prefer). The firm’s total cost function is 20 + 5Q + .5Q2. Identify profit maximizing quantity and price Q = _____, P = _____ Graph the relevant curves in the area provided (Hint: If you have difficulty drawing the graph, try plotting a couple of points along the curve) Identify CS and PS in the graph Calculate...

Demand function is: Q = 16 – p. Supply function is: Q = -4 + p....

Demand function is: Q = 16 – p. Supply function is: Q = -4 + p. (Show me your math) a) What is the quantity demanded and quantity supplied at price 6? Is there an excess demand or supply? b) What is the equilibrium price and quantity?

solve by details y"+y=-1 ,y(0)=0,y(Pi/2)=0 by properties of green function

Consider the constant-elasticity demand function Q = p−ε, where ε > 0. Solve for the inverse...

Consider the constant-elasticity demand function Q = p−ε, where ε > 0. Solve for the inverse demand function p(Q). Calculate the demand price elasticity. Show that p(Q)/MR(Q) is independent of the output level Q. (Hint: Use the relationship between marginal revenue and the elasticity of demand.)

Question