A person's preferences are represented by U=(XY)1/2 Find his Marshallian demand for x, his indirect utility...

A person's preferences are represented by U=(XY)^1/2

Find his Marshallian demand for x, his indirect utility functions, his expenditure function and his Hicksian demand for good Y.

Expert Solution

Rahul Sunny answered 1 year ago

U= (xy)1/3 Derive the Marshallian demands and indirect utility functions

A consumer has his preferences represented by the utility function U(x,y) = min {5x + 4y,...

A consumer has his preferences represented by the utility function U(x,y) = min {5x + 4y, 4x + 7y} if x is on the horizontal axis and y is on the vertical axis, what is the slope of his indifference curve at the point (10,10) a. -4/7 b. -5/4 c. -4/5 d. -7/4 e. -5/7

Consider a consumer with preferences represented by the utility function: u(x, y) = x1/4y1/2 Suppose the...

Consider a consumer with preferences represented by the utility function: u(x, y) = x1/4y1/2 Suppose the consumer has income M = 10 and the prices are px=1 and Py = 2. (a) Are goods x and y both desirable? (b) Are there implications for the utility maximization problem for the consumer from your finding in 1a? If so, explain in detail. (c) Derive the utility maximizing bundle.

Consider a consumer with preferences represented by the utility function: u(x; y) = x1/4y1/2 Suppose the...

Consider a consumer with preferences represented by the utility function: u(x; y) = x1/4y1/2 Suppose the consumer has income M = 10 and the prices are px = 1 and py = 2. (a) Are goods x and y both desirable? (b) Are there implications for the utility maximization problem for the consumer from your finding in a? If so, explain in detail.

hx=u, hy=u/2. Find the Marshallian demands for X and Y.

A consumer's preferences for food (x) and clothes (y) are represented by the utility function u(x,y)=...

A consumer's preferences for food (x) and clothes (y) are represented by the utility function u(x,y)= x + 2 ln(y). The prices of food and clothes are px and py euros/unit, respectively, and the consumer's income is I euros. A. (10 points) Describe the consumer's problem, including her budget constraints, and calculate her ordinary demand functions, x(px,py,I) and y(px,py,I). B. (10 points) For prices and income (px,py,I)=(1,1,3), calculate the substitution and income effects over the demand of y of a...

"Suppose a consumer has preferences represented by the utility function U(X,Y) = X(^2)Y Suppose Py =...

"Suppose a consumer has preferences represented by the utility function U(X,Y) = X(^2)Y Suppose Py = 1, and the consumer has $360 to spend. Draw the Price-Consumption Curve for this consumer for income values Px =1, Px = 2, and Px = 5. Your graph should accurately draw the budget constraints for each income level and specifically label the bundles that the consumer chooses for each income level. Also for each bundle that the consumer chooses, draw the indifference curve...

Consider the utility function of U(X,Y) = X0.2Y0.4 Derive the Marshallian demand curve for X Derive...

Consider the utility function of U(X,Y) = X0.2Y0.4 Derive the Marshallian demand curve for X Derive the Hicksan demand curve for X What is the own-price elasticity for X? What is the income elasticity of X? What is the price elasticity of X with respect to y (Py) If the income level is 120, then what is the Pxthat maximizes total spending Show that Slutsky equation holds Show that ex,px+ex,py+ex,I=0. What does it mean? Show that Engle Aggregation holds. What does it...

Dr Pepper’s preferences can be represented by the utility function u(x,y) = x + y where...

Dr Pepper’s preferences can be represented by the utility function u(x,y) = x + y where x is his consumption of Coca Cola (hereafter, referred to as Coke) and y is his consumption of orange juice (hereafter, referred to as OJ). Initially, both types of drinks are not taxed and with an income of $12 he faces prices ($1, $2). On the advice of nutritionists, the government decides to impose a specific tax of $2 on Coke which leads to...

Barbara has preferences over flowers (x 1) and vases (x 2) represented by u( x 1...

Barbara has preferences over flowers (x 1) and vases (x 2) represented by u( x 1 , x 2 ) = x 1 x 2. Her income is m=100m = 100 and prices are initially p 1 = 1 and p 2 = 2. If the price of flowers increases to p 1 ′ = 5, the decrease in demand for vases attributed to the income effect is: 1. 0 2. 20 3. 50 4. 75

Question