3. Consider the utility function U(1, y) = min{r, 2y} Find (a) the Marshallian demand functions for r and y, (b) the indirect utility function, (c) Use the expression for the indirect utility function that your found in part (b) to find the expenditure function and the Hicksian demand for good r. [Note: Do not answer this question by solving the expenditure minimization problem!]
3. Consider the utility function U(1, y) = min{r, 2y} Find (a) the Marshallian demand functions for r and y, (b) the indirect utility function, (c) Use the expression for the indirect utility function that your found in part (b) to find the expenditure function and the Hicksian demand for good r. [Note: Do not answer this question by solving the expenditure minimization problem!]
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.8P
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