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Try to answer this question about price theory 3. Consider the Dixit-Stiglitz utility function (constant elasticity of substitution, CES) U =( wen q(w )'dw) ,

Try to answer this question about price theory

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3. Consider the Dixit-Stiglitz utility function (constant elasticity of substitution, CES) U =( wen q(w )'dw) , where 0 1, and o = . The budget constraint is p(w)q(w)dw = R. WEn What's the elasticity of substitution? Solve for the Walrasian demand function and the Hicksian demand function. (Hint: let Q = U, and make use of P =

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