PLEASE ANSWER THE ALL PART 3 2. A consumer has the utility functionu = (x₁c₁) ª (x₂-C₂), a+b=1U = (x1 - C1) (x2 - C2)b, a+b=1where the ci are interpreted as minimum subsistence levels of i, i = 1,2xi,i=1,2. Derive the consumer's Hicksian demand functions and expenditurefunction.3. The consumer has the utility function = x=x1ax21-a.(a) Find her indirect utility function.(b) Confirm Roy's identity by:i. Differentiating the indirect utility function with respect to the price ofgood 1;ii. Using the first-order conditions to obtain solutions for 1x1 and XX,and therefore an expression for -A1-Ax1;iii. Showing that (a) and (b) give the same result.

The maximum-value function that depicts the maximum attainable utility for the given income of the…

3. The consumer has the utility function" = x₁x₂x1ax21-a. (a) Find her indirect utility function. (b) Confirm Roy's identity by: i. Differentiating the indirect utility function with respect to the price of good 1; ii. Using the first-order conditions to obtain solutions for 1x1 and XX, and therefore an expression for -A1-Ax1; iii. Showing that (a) and (b) give the same result.

3. The consumer has the utility function" = x₁x₂x1ax21-a. (a) Find her indirect utility function. (b) Confirm Roy's identity by: i. Differentiating the indirect utility function with respect to the price of good 1; ii. Using the first-order conditions to obtain solutions for 1x1 and XX, and therefore an expression for -A1-Ax1; iii. Showing that (a) and (b) give the same result.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.14P

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