Consider the following Constant Elasticity of Substitution utility function U(x1,x2) = x1^p+x2^p)^1/p
a. Show that the above utility function corresponds to (hint:use the MRS between good 1 and good 2. The ->refers to the concept of limits.
1. The perfect substitute utility function at p=1
2. The Cobb-Douglas utility function as p -->0
3. The Leontiff (of min(x1,x2) as p--> -infinity
b. For infinity<p<1, a given level of income I and prices p1 and p2.
1. Find the marshallian demands
2. Find the indirect utility function
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