Marvin has a Cobb - Douglas utility function(U= 90.5 1 q0.5 2), his income is Y = 10, and he faces prices of p2 = 2. (a) Find the uncompensated demand (marshallian demand) curves for good 1. (b) Find the compensated demand (hicksian demand) curves for good 1. (c) Find the expenditure function (E(p1, p2, u)) From now on, suppose the price of good 1 increases from p1 = 1, to p '1 = 2 (d) Find the change in consumer surplus(ACS), Using uncompensated demand (marshallian demand) function. (e) Find the compensating variation (CV). (f) Find the compensating variation (EV).

Marvin has a Cobb - Douglas utility function(U= 90.5 1 q0.5 2), his income is Y = 10, and he faces prices of p2 = 2. (a) Find the uncompensated demand (marshallian demand) curves for good 1. (b) Find the compensated demand (hicksian demand) curves for good 1. (c) Find the expenditure function (E(p1, p2, u)) From now on, suppose the price of good 1 increases from p1 = 1, to p '1 = 2 (d) Find the change in consumer surplus(ACS), Using uncompensated demand (marshallian demand) function. (e) Find the compensating variation (CV). (f) Find the compensating variation (EV).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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