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    4 views10 pages

    Review Assignment

    Uploaded by

    Halima

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 10
    Review Assignment QI: Given the constrained optimization problem Maximize U = (x + 1)(y + 2) and the constraint xP, + yPy = B (a) Find the optimal values. (Or Find consumer's Marshallian demand functions) (b) Check the second order conditions for a maximum, (©) Verify that the indifference curve is strictly convex. (4) Caleulate the comparative static derivatives ee oe oe oe andl interpret these results (@) Find the maximum value function V. (O) Write the associated dual problem. Deduce the minimum expendituse = E(Py, Py, U*) of the dual problem. corresponding: dual problem, (g) Use Shephard’s Lemma to find the optimal solution of the (h) Find Sp aecand i by using the envelope theorem. @ Take P, = 1,B, = 1,B = 1 and draw the map of the indifference eu budget line is tangent to indifference curve at optimal value U . Show that the Q2: Minimize E=P,x + Pyy Subject to x(y + 2) = U* (@) Find consumer’s Hicksian demand functions x" and y" (b) Is the second-order sufficient condition for minim sa (©) Find the minimum value function E = £(P., P,, u') (d) Set up the dual problem. (©) Find the maximum value function of the dual problem () Use Roy’s identity to find x™and y™ |), |, May Us Ga (y+ a) at ) f ie (arly tds ML 6-02 a Zu (yt a) ME-2R Jeo hye (ae) + ALN Jeo % - B-ah-yP.o —#, A: yta . ar) Ph 5 ye fe fxt-2 — tae Pe (x40 n p + [5 (ur)-2 | f,- 13 af, + [ p. (aah Ip 8 Axl, - B-p,+ af, B-P.+ ah x om Ae He far sings aly ge Re bet i-a gh y = fr [ecfer abe - ate pi, “Fe [ p-frdhrat). loan . [eka -2] : 38 YL yo. ba heal & ately GE: N\A WANNA, - oO fA q 5 2 g (nl [?: 4 as |e [6 : | Sy f, { Ba hyp Zs Ly \ Hy) = -Po (a+ DC 44 a) yO = (o-PRaar, 4 1)(82%722 9 va) ax 2 fy = (Behe 2hes Per 2h heat )( 6 fe ) > ee 2p, AP, Ve W= (6+, 9h)* o PR, (x) Cf) Duar PRoBien ; Mininize Ex x hoy P OE (x4 lysa)- yt Be E fen, WAG. (Or Ree” JUaRR = 6+ hr at ura att fat =- & —~, = / = EY \w a . / Sf / @ Mu Cerh+¢h sk vlprae uw" Zech hr plu -x yea] Ae he p]- ea) -9 re fete un NM) Ute % (yr) Ze Repfxtn]eo —é iy TF ) “. lyrayl Z, 2 ue x (yr2)20 — "5 u 7 J J ut fe = (y +2. a 7 Be p ty Z * U" hk = ie uf = Aly) he 7 ro ; uch -2 . X= G ly+ a) ——+'"% th sore a) Kos assent hs le- tyra)” ¢ o\ ( ne 0 8 Cap) POT cantina 0, 4 - & pe ay f C(t er GE eye Ayar PROBLEM is Ux. Wes aly+ 2) aubject & fay Pg Ee AWA R36 fey B26 and woke U” Me alogeck than ne B. au RR ap +h oh ns Beak. auek’ eh w ah = 4 ah (oral, J” Ca he 0)” (B+ah, U = Vo Penckon “TRY © Q's (dont ~ (8rah) eR PC 2(m+ 28) 26+ Dh? wy 0. f u BRD (a)(o $NA RAIA AT t Wey (gee) (Uh ph)” / = GRC BRT 4p - (ea Pp R)* = (8+aR) (2% -B) her? Roy's dome av. A= CBr 2K) 06 are vm - Me, - — [-U6r2h? he” 422? ~ (ea? (+28 ) ae 4 Pb, ; Hs Me _ ~ yraG) 8-6 Wye 4 Be - (06-8) 8) aaa 4 Pe Vy y= ($26) 104 HAA ay é Comparative Shae |) ae bP ah Qf Qu ox 2 J >0 1b ae i 7B Ok Noeral Ge? fe 2 yo QR, af Sp seme, HE) I w y a? abe (ore de WA 7% (ah) at ab yah nh 2-241 2h)

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