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Consider the Cobb-Douglas utility function u(x1,x2)=x1^(a)x2^(1-a). a. Find the Hicksian demand correspondence h(p, u) and the...

Consider the Cobb-Douglas utility function u(x1,x2)=x1^(a)x2^(1-a).

a. Find the Hicksian demand correspondence h(p, u) and the expenditure function e(p,u) using the optimality conditions for the EMP.

b. Derive the indirect utility function from the expenditure function using the relationship e(p,v(p,w)) =w.

c. Derive the Walrasian demand correspondence from the Hicksian demand correspondence and the indirect utility function using the relationship

x(p,w)=h(p,v(p,w)).

d. vertify roy's identity.

e. find the substitution matrix and the slutsky matrix, and vertify the slutsky equation.

f. check that the slutsky matrix is negative semi-definite and symmetric and satisfies S(p,w)p=0.

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Due to time constraint, i am doing the first four parts of the sum.

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