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Consider the following Constant Elasticity of Substitution utility function U(x1,x2) = x1^p+x2^p)^1/p                         &nbs

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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