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).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.5P

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