Consider the following expenditure minimization problem min E(x1,x2)=p1x1+p2x2 subject to U(bar) = 8x^0.5y^1.5

x1,x2

A. Graph this consumer's problem

B.

Write down the first order conditions for this constrained optimization problem

C. Solve for the Hicksian demand functions, x1^c(p1,p2,Ubar) and x2^c(p1,p2,Ubar)

D. Solve for the expenditure function, E (p1,p2,Ubar) OK, now you will need to get a calculator. Let Px=$2.50 and Py=$3.33 and U=432

E. What are the numerical values of x1^c(p1,p2,Ubar) and x2^c(p1,p2,Ubar), E (p1,p2,Ubar). Put these values on your graph.

F.

What is the numerical value of C? Use words to interpret this number.