Suppose you have the following indirect utility function:V(px, Py, I) = In (PxPyWhat are marshallian demands for x and y?O(gx, gy) = (2p, 2p,2px' 2pyO(8x, 8y) = (In, In )2px2pyIO(gx, gy) = (exp(2p.Py), exp( 2p.P,))2pxPy%DO(8x» 8y) = (%3D2p, +P,' Px+2p,What is the expenditure function for the associated expenditure minimization problem?OE(px, Py, U) = (px + Py) In(U)%3DOE(px, Py, U) = Vexp(U)PxPy%3DOE(Px, Py, U) = (p + p3) In(U)%3DOE(Px, Py, U) = exp(U) PxPy%3D

Utility refers to the amount of satisfaction a person gets from the consumption of goods and…

Suppose you have the following indirect utility function: V (Px» Py, I) = In PxPy %3D What are marshallian demands for x and y? O(8x, 8y) = (: %3D 2px 2py 1 O(gx, 8y) = (In 2py 2px O(gx, gy) = (exp(2p.Py -), exp(2p.Py O(gx»8y) = (; 2p, +P, Px+2py What is the expenditure function for the associated expenditure minimization problem? OE(Px, Py, U) = (px + Py) In(U) OE(Px, Py, U) = Vexp(U)PxPy %3D OE(Px, Py, U) = (pi + p3) In(U) OE(P. Py U) = exp(U)p.Py

Suppose you have the following indirect utility function: V (Px» Py, I) = In PxPy %3D What are marshallian demands for x and y? O(8x, 8y) = (: %3D 2px 2py 1 O(gx, 8y) = (In 2py 2px O(gx, gy) = (exp(2p.Py -), exp(2p.Py O(gx»8y) = (; 2p, +P, Px+2py What is the expenditure function for the associated expenditure minimization problem? OE(Px, Py, U) = (px + Py) In(U) OE(Px, Py, U) = Vexp(U)PxPy %3D OE(Px, Py, U) = (pi + p3) In(U) OE(P. Py U) = exp(U)p.Py

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.5P

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