Please Show Each and Every Working VERY CLEARLY. Please Answer ONLY (ii) Q2 Consider the Cobb-Douglas utility function, u;(X, Y) = Xª Y' -ª for a rational consumeri. Derive the Marshallian demand functions for X and Y.ii. Use the Marshallian demand functions for X and Y above to compute the indirectutility function and the expenditure function.iii. Using the expenditure function obtained in part (ii) together with Shephard's lemma,derive the Hicksian compensated demand function for X and Y.iv. Suppose a = 0.5, Px = Py = $2, M (money income per week) = $100, find theconsumer's optimal bundle. Illustrate your results graphically as well.v. If the government gives $10 financial support weekly for each family during theCOVID-19 lockdown period, how would the results be changed in iv? Whilepresenting the calculations clearly, illustrate the outcome graphically.

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Q2 Consider the Cobb-Douglas utility function, u,(X, Y) = Xª Y' -ª for a rational consumer i. Derive the Marshallian demand functions for X and Y. ii. Use the Marshallian demand functions for X and Y above to compute the indirect utility function and the expenditure function. uith Shephard's lemma

Q2 Consider the Cobb-Douglas utility function, u,(X, Y) = Xª Y' -ª for a rational consumer i. Derive the Marshallian demand functions for X and Y. ii. Use the Marshallian demand functions for X and Y above to compute the indirect utility function and the expenditure function. uith Shephard's lemma

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.4P

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