Microeconomics A Contemporary Intro
10th Edition
ISBN: 9781285635101
Author: MCEACHERN
Publisher: Cengage
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Transcribed Image Text:Bonus Question (Optional w/ Extra Points)
Consider a simple utility function of the form: U(x, y) = xªy¹-a.
=
a) Solve the expenditure minimization problem and use your solution to show that the
expenditure function for this person is E(px, Py, u) K¹uppy, where K is some
parameter in terms of a, and u is the threshold utility level in the expenditure mini-
mization problem.
b) Compute the Hicksian demand function for good x.
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