5 Jan 2021

An Individual consumes good X1 and X2. Let W be the wealth of the individual and P1>0, P2>0 be the prices of the goods. For each of the utility functions provide a real life example of two goods X1 and X2 that satisfy them, draw the indifference curves, determine whether preferences are convex, strictly convex or neither, and compute the Walrasian demand, indirect utility function, Hicksian demand, and Expenditure function.

U (X1, X2) =(X1^0.4) *(X^0.6) U (X1, X2) =min (X1, X2) +3 max (X1, X2)

5 Jan 2021

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