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21011ps04

# 21011ps04 - Derive the Marshallian demands Hicksian demands...

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Econ 210A Fall 2011 Assignment #4 Due date: Wednesday, November 2 1. Consider a consumer with a continuous, strictly quasi-concave utility function. Show that the Marshallian demand functions are single-valued. 2. Consider the consumer°s utility maximization problem with two goods. a. Show the e/ect of a change in income on the demand for the two goods (for general utility functions). b. Derive the e/ect of a change in one of the prices on the demand for each good. Can you show that the e/ect is negative. Why or why not? 3. Derive the Marshallian demands, Hicksian demands, indirect utility functions, and
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Unformatted text preview: Derive the Marshallian demands, Hicksian demands, indirect utility functions, and expenditure functions for the following utility functions: a. & 1 q 1 & 1 q 2 b. ( q 1 & & 1 ) & ( q 2 & & 2 ) 1 & & where ±; & 1 ; and & 2 are positive parameters and ± < 1 : c. min f q 1 ; q 2 g d. ( Aq ± 1 + Bq ± 2 ) 1 & where A; B > and ² 6 = 0 , ² < 1 : For the utility function in d derive the elasticity of substitution: [email protected] ( g 1 ( p;m ) =g 2 ( p;m )) @ ( p 1 =p 2 ) p 1 =p 2 g 1 ( p;m ) =g 2 ( p;m ) 1...
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