4.8 Two of the simplest utility functions are: 1. Fixed proportions: U(x, y) = min[x, y]. 2. Perfect substitutes: U(x, y) = x + y. a. For each of these utility functions, compute the following: • Demand functions for x and y • Indirect utility function • Expenditure function b. Discuss the particular forms of these functions you calculated-why do they take the specific forms they do?
4.8 Two of the simplest utility functions are: 1. Fixed proportions: U(x, y) = min[x, y]. 2. Perfect substitutes: U(x, y) = x + y. a. For each of these utility functions, compute the following: • Demand functions for x and y • Indirect utility function • Expenditure function b. Discuss the particular forms of these functions you calculated-why do they take the specific forms they do?
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.8P
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![4.8
Two of the simplest utility functions are:
1. Fixed proportions: U(x, y) = min[x, y].
2. Perfect substitutes: U(x, y) = x + y.
a. For each of these utility functions, compute the
following:
• Demand functions for x and y
• Indirect utility function
• Expenditure function
b. Discuss the particular forms of these functions you
calculated-why do they take the specific forms they
do?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb3d8bff9-7d45-4aad-9e5c-db6c1cc6cf01%2F73808435-2ec5-44e8-a7f9-9cfaf4b6008f%2F44gtwkg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4.8
Two of the simplest utility functions are:
1. Fixed proportions: U(x, y) = min[x, y].
2. Perfect substitutes: U(x, y) = x + y.
a. For each of these utility functions, compute the
following:
• Demand functions for x and y
• Indirect utility function
• Expenditure function
b. Discuss the particular forms of these functions you
calculated-why do they take the specific forms they
do?
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