Problem_Set__2_-_demand_and_utility

# Problem_Set__2_-_demand_and_utility - Econ 701...

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

Econ 701 – Microeconomic Theory – Problem Set #2 Consumer Utility and Demand Functions – Review Problems Notes: This problem set is designed to give you a little bit of practice in computing derivatives and solving some simple optimization problems. For reference material, see chapters 2 and 3 of Nicholson. Consider the following utility functions. Using a budget constraint of the form - y p x p I y x + = , find the demand for goods x and y . 1. 3 2 ) , ( y x y x u = 2. ) 3 )( 2 ( ) , ( - - = y x y x u 3. y x y x u ln 3 ln 2 ) , ( + = 4. y x y x u 3 2 ) , ( = 5. 2 1 2 1 ) , ( y x y x u + = 6. Find the indirect utility function associated with the utility function in 1) above. 7. Find the indirect utility function associated with the utility function in 5) above. 8. If you have done the problems correctly (and I have set them up correctly), your answers for 1), 3) and 4) should be identical. Explain in words why this is the case (Hint: are these functions somehow related? How so?) Can you think of yet another

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 11/12/2009 for the course ECONOMICS 701 taught by Professor Baker during the Spring '09 term at CUNY Hunter.

### Page1 / 2

Problem_Set__2_-_demand_and_utility - Econ 701...

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

View Full Document
Ask a homework question - tutors are online