Question

Suppose that the indirect utility function of a consumer is u(p1,p2,I) = I(p10,5+p20,5)-2. Calculate the terms...

Suppose that the indirect utility function of a consumer is u(p1,p2,I) = I(p10,5+p20,5)-2.

Calculate the terms on the left hand side and on the right hand side of the Slutsky-equation and show that the two sides are equal.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the indirect utility functions is: v(p1, p2, m) = ( ln(m /p2) , if p1...
Suppose the indirect utility functions is: v(p1, p2, m) = ( ln(m /p2) , if p1 ≥ m. (m−p1)/ p1 + ln(p1/ p2 ), if p1 < m. a) Compute the Marshallian demand for both goods x1 and x2 for the different values of m. b) Based on your answers from (a), can you guess the type of the original utility function u(x) (Hint: It is one of the 5 common utility functions we have taken in the course)? Explain...
Suppose the indirect utility functions is: v(p1, p2, m) = ln (m /p2) , if p1...
Suppose the indirect utility functions is: v(p1, p2, m) = ln (m /p2) , if p1 ≥ m.( m−p1)/ p1 + ln (p1/ p2) , if p1 < m. a) Compute the Marshallian demand for both goods x1 and x2 for the different values of m. b) Based on your answers from (a), can you guess the type of the original utility function u(x) (Hint: It is one of the 5 common utility functions we have taken in the course)?...
5. The utility function of a consumer is u(x, y) =x2y i. Find the demand functions...
5. The utility function of a consumer is u(x, y) =x2y i. Find the demand functions x(p1,p2,m) and y(p1,p2,m). ii. What is the consumers indirect utility?
Consider the following utility function: U(x1,x2) X11/3 X2 Suppose a consumer with the above utility function...
Consider the following utility function: U(x1,x2) X11/3 X2 Suppose a consumer with the above utility function faces prices p1 = 2 and p2 = 3 and he has an income m = 12. What’s his optimal bundle to consume?
What is the money-metric utility function of a consumer with the utility function U(q1, q2,) =?q1...
What is the money-metric utility function of a consumer with the utility function U(q1, q2,) =?q1 +?q2 ? Use prices p1=p2= 2 to determine the money-metric utility function.
A consumer has the quasi-linear utility function U(q1,q2) = 64q1^(1/2) + q2 Assume p2 = 1...
A consumer has the quasi-linear utility function U(q1,q2) = 64q1^(1/2) + q2 Assume p2 = 1 and Y = 100. Find the consumer's compensating and equivalent variations for an increase in p1 from 1 to 2.
A consumer has the quasi-linear utility function U(q1,q2) = 64q1^(1/2) + q2 Assume p2 = 1...
A consumer has the quasi-linear utility function U(q1,q2) = 64q1^(1/2) + q2 Assume p2 = 1 and Y = 100. Find the consumer's compensating and equivalent variations for an increase in p1 from 1 to 2.
A consumer has utility function U(q1; q2) = 4(q1)^(.5) + q2, and income y = 10....
A consumer has utility function U(q1; q2) = 4(q1)^(.5) + q2, and income y = 10. Let the price of good 2 be p2 = 1, and suppose the price of good 1 increases from p1 = 1 to p1 = 2. Find the demand function for good 1.
2. For Each of the following situations, i) Write the Indirect Utility Function ii) Write the...
2. For Each of the following situations, i) Write the Indirect Utility Function ii) Write the Expenditure Function iii) Calculate the Compensating Variation iv) Calculate the Equivalent Variation a) U(X,Y) = X^1/2 x Y^1/2. M = $288. Initially, PX= 16 and PY = 1. Then the Price of X changes to PX= 9. i) Indirect Utility Function: __________________________ ii) Expenditure Function: ____________________________ iii) CV = ________________ iv) EV = ________________ b) U(X,Y) = MIN (X, 3Y). M = $40. Initially,...
Suppose the utility function is given by U(x1, x2) = 14 min{2x, 3y}. Calculate the optimal...
Suppose the utility function is given by U(x1, x2) = 14 min{2x, 3y}. Calculate the optimal consumption bundle if income is m, and prices are p1, and p2.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT