HWIII.08 - HOMEWORK ECONOMICS 200A III. DEMAND THEORY AND...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: HOMEWORK ECONOMICS 200A III. DEMAND THEORY AND DUALITY R. R. RUSSELL FALL 2008 1. Consider the following three utility functions: U ( x 1 ,x 2 ) = ( x 1 ) 1 / 2 + x 2 , U ( x 1 ,x 2 ) = x 1 + ln x 2 U ( x 1 ,x 2 ) = ( x 1- ) x 2 , > . (a) Restricting prices to those that yield interior solutions, find the first-order conditions for maximizing these utility functions subject to a budget constraint, p x = y , and check to see that second-order conditions are satisfied. (b) Without restricting prices to those that yield interior solutions, find the first-order conditions for maximizing these utility functions subject to the budget constraint. (Be careful here to consider different signs of and to restrict choices to those where the utility function is well defined.) (c) Derive the demand functions for each utility function and verify the requisite ho- mogeneity condition. (d). Derive the indirect utility function dual to each utility function and verify Roys Identity....
View Full Document

This note was uploaded on 07/06/2009 for the course ECON 200a taught by Professor Russell during the Fall '08 term at UC Riverside.

Page1 / 2

HWIII.08 - HOMEWORK ECONOMICS 200A III. DEMAND THEORY AND...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online