Question

1. Using the following utility function, U(x1,x2) = x1x2+x1+2x2+2 Find the demand functions for both x1...

1. Using the following utility function, U(x1,x2) = x1x2+x1+2x2+2 Find the demand functions for both x1 and x2 (as functions of p1, p2, and m).

Thank you!

Homework Answers

Answer #1

Dont forget to give a thumbs up if you like the answer.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A consumer has utility function U(x1,x2)= x1x2 / (x1 + x2) (a) Solve the utility maximization...
A consumer has utility function U(x1,x2)= x1x2 / (x1 + x2) (a) Solve the utility maximization problem. Construct the Marshallian demand function D(p,I) and show that the indirect utility function is V (p, I) = I / (p1+ 2 * sqrt (p1*p2) + p2) (b) Find the corresponding expenditure function e(p; u). HINT: Holding p fixed, V and e are inverses. So you can find the expenditure function by working with the answer to part (a). (c) Construct the Hicksian...
The utility function is given by u (x1,x2) = x1^0.5 + x2^0.5 1) Find the marginal...
The utility function is given by u (x1,x2) = x1^0.5 + x2^0.5 1) Find the marginal rate of substitution (MRSx1,x2 ) 2) Derive the demand functions x1(p1,p2,m) and x2(p1, p2,m) by using the method of Lagrange.
The utility function is given by u (x1, x2) = x1^0.5+x2^0.5 1) Find the marginal rate...
The utility function is given by u (x1, x2) = x1^0.5+x2^0.5 1) Find the marginal rate of substitution (MRSx1,x2 ) 2) Derive the demand functions x1(p1, p2, m) and x2(p1,p2, m) by using the method of Lagrange.
Qin has the utility function U(x1, x2) = x1 + x1x2, where x1 is her consumption...
Qin has the utility function U(x1, x2) = x1 + x1x2, where x1 is her consumption of good 1 and x2 is her consumption of good 2. The price of good 1 is p1, the price of good 2 is p2, and her income is M. Setting the marginal rate of substitution equal to the price ratio yields this equation: p1/p2 = (1+x2)/(A+x1) where A is a number. What is A? Suppose p1 = 11, p2 = 3 and M...
2. A consumer has the utility function U ( X1, X2 ) = X1 + X2...
2. A consumer has the utility function U ( X1, X2 ) = X1 + X2 + X1X2 and the budget constraint P1X1 + P2X2 = M , where M is income, and P1 and P2 are the prices of the two goods. . a. Find the consumer’s marginal rate of substitution (MRS) between the two goods. b. Use the condition (MRS = price ratio) and the budget constraint to find the demand functions for the two goods. c. Are...
Suppose an individual consumers two goods, with utility function U (x1; x2) = x1 + 6(x1x2)^1/2...
Suppose an individual consumers two goods, with utility function U (x1; x2) = x1 + 6(x1x2)^1/2 + 9x2. Formulate the utility maximization problem when she faces a budget line p1x1 + p2x2 = I. Find the demand functions for goods 1 and 2. (b) Now consider an individual consumers with utility function U (x1; x2) = x1^1/2 + 3x2^1/2. Formulate the utility maximization problem when she faces a budget line p1x1 + p2x2 = I. Find the demand functions for...
Consider the utility function: u( x1 , x2 ) = 2√ x1 + 2√x2 a) Find...
Consider the utility function: u( x1 , x2 ) = 2√ x1 + 2√x2 a) Find the Marshallian demand function. Use ( p1 , p2 ) to denote the exogenous prices of x1 and x2 respectively. Use y to denote the consumer's disposable income. b) Find the indirect utility function and verify Roy's identity c) Find the expenditure function d) Find the Hicksian demand function
Suppose x1 and x2 are perfect substitutes with the utility function U(x1, x2) = 2x1 +...
Suppose x1 and x2 are perfect substitutes with the utility function U(x1, x2) = 2x1 + 6x2. If p1 = 1, p2 = 2, and income m = 10, what it the optimal bundle (x1*, x2*)?
1.) Liz has utility given by u(x2,x1)=x1^7x2^8. If P1=$10, P2=$20, and I = $150, find Liz’s...
1.) Liz has utility given by u(x2,x1)=x1^7x2^8. If P1=$10, P2=$20, and I = $150, find Liz’s optimal consumption of good 1. (Hint: you can use the 5 step method or one of the demand functions derived in class to find the answer). 2.) Using the information from question 1, find Liz’s optimal consumption of good 2 3.) Lyndsay has utility given by u(x2,x1)=min{x1/3,x2/7}. If P1=$1, P2=$1, and I=$10, find Lyndsay’s optimal consumption of good 1. (Hint: this is Leontief utility)....
Consider a two good economy. A consumer has a utility function u(x1, x2) = exp (x1x2)....
Consider a two good economy. A consumer has a utility function u(x1, x2) = exp (x1x2). Let p = p1 and x = x1. (1) Compute the consumer's individual demand function of good 1 d(p). (2) Compute the price elasticity of d(p). Compute the income elasticity of d(p). Is good 1 an inferior good, a normal good or neither? Explain. (3) Suppose that we do not know the consumer's utility function but we know that the income elasticity of his...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT