An agent consumes quantity (x1,x2) of goods 1 and 2. Here is his utility function: (1, 2) = 1 32, his budget constraint is: p1x1+p2x2=m.

(a) Calculate the agent's Marshallian demand (x 1 , x 2 ).

(b) Calculate the agent's indirect utility function.

(c) Show the indirect utility function is homogeneous of degree 0 in prices and income.

(d) Derive the agent's expenditure function.

(e) Show the expenditure function is homogeneous of degree 1 in prices.

(f) Roy's identity for good 1 states that: 1 = (1, 2, ) 1 (1, 2, ) Verify this equation (you need not verify it for good 2).