5.6 Suppose that an individual's utility for X and Y is represented by the CES function (for...

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5.6 Suppose that an individual's utility for X and Y is represented by the CES function (for 5 = -l):

utility = U(X,Y) = -^ - j.

a. Use the Lagrangian multiplier method to calculate the uncompensated demand func tions for Xand Ffor this function.

b. Show that the demand functions calculated in part

(a) are homogeneous of degree zero in Px,PY> and /.

c. How do changes in /or in PY shift the demand curve for good X?

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Microeconomic Theory Basic Principles And Extensions

ISBN: 9780030335938

8th Edition

Authors: Walter Nicholson

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Question Posted: Nov 14, 2024 01:00 AM

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5.6 Suppose that an individual's utility for X and Y is represented by the CES function (for...

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Microeconomic Theory Basic Principles And Extensions

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