Derive the Slutsky equation step by step. What is the significance of this equation? What is the difference between the Hicksian and the Marshallian demand functions?
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Derive the Slutsky equation step by step. What is the significance of this equation? What is the difference between the Hicksian and the Marshallian demand functions? Do not use chatgpt
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- Derive the Slutsky equation. What is the significance of this equation? What is the difference between the Hicksian and the Marshallian demand functions?Define and explain the difference between Marshallian demand function and Hicksian demand function.Derive the Hicksian demand and the expenditure function for u(x,y)=(.4X^.5+.6Y^.5)^2
- Q2. Derive the Hicksian demand and the expenditure function for u (x, y) = (0.3/x + 0.7 /y).Explain the Friedmanian model of NAIRUD9) Given current prices, Johnson spends all his free time on pursuing gold (x1) from Danny, which costs (p1) hours of service per coin. His Marshallian demand function can be represented by x1(p1,I) = I/p1 and his Hicksian demand can be represented by xh1(p1,u) = u/5 . (a) Verify that the Slutsky Equation holds for x1 when there is a change in p1. (b) What is the substitution effect of x1 when there is a change in p1? (c) What is the income effect of x1 when there is a change in p1?
- the Marshallian Demands for the utility function U(x,y) =0.5x + 5ln ya) For this utility function calculate the Hicksian demand functions for x and y.b) Use your Marshallian and Hicksian demand functions to calculate the partial derivative of both Marshallian and Hicksian demand for x with respect to px and the partial derivative of Marshallian demand with respect to income.c) Use your answers for (b) to verify the Slutsky equationWhen comparing Hicksian demand to Marshallian demand, we know that Marshallian demand always has a flatter slope Hicksian demand always has a flatter slope They are never the same They are always the same They are the same if there is no income effect x They are the same is there is no substitution effect They both may be positively sloped in special cases Two answers are correct Three answers are correct No answer is correctA consumer's Marshallian demand for x is given by 9x(P, Py, I) 31 = consumer's indirect utility function is V(Pa, Py, I) Px +3py (Hint: make sure that you derive the Hicksian demand for x): əha > 0 and, hence, x and y are net complements дру მha (b) > 0 and, hence, x and y are net substitutes дру (c) ah <0 and, hence, x and y are net complements дру (d) ah <0 and, hence, x and y are net substitutes дру (e) მh = дру " If the Px +3py then we can conclude that = 0 and, hence, x and y are neither net complements nor net substitutes
- Gina is at a toy store and is buying toy T-Rex's (x), which cost px, and toy yaks (y), which cost py. Her income is I. She likes 3 T-Rex's as much as she likes 4 yaks. These toys are perfect substitutes for her.Paige has the utility function U(x, y) = ln(x) + 4y Do not worry about corner solutions when answering the following questions, you can use the Lagrangian multiplier method. Paige's budget constraint is px x +Pyy = IAlonso has preferences for sport cars (C) and paella (P) given by the utility function U(C, P) = 4CP. The prices for C and P are, respectively, pc and pp. In what follows, do not worry if the results are not integers.
