An agent consumes quantity (x1,x2) of goods 1 and 2. Here is his utility function: U(x1, x2) = x13 x2, his budget constraint is: p1x1+p2x2=m. (a) Calculate the agent’s Marshallian demand (x*1 , x*2 ) (b) Calculate the agent’s indirect utility function.

An agent consumes quantity (x1,x2) of goods 1 and 2. Here is his utility function: U(x1, x2) = x13 x2, his budget constraint is: p1x1+p2x2=m. (a) Calculate the agent’s Marshallian demand (x1 , x2 ) (b) Calculate the agent’s indirect utility function.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 11SQ

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Question

An agent consumes quantity (x₁,x2) of goods 1 and 2. Here is his utility function: U(x1, x2) = x1³ x2, his budget constraint is: p1x1+p2x2=m.

(a) Calculate the agent’s Marshallian demand (x*₁ , x*₂ )

(b) Calculate the agent’s indirect utility function.

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