Academic help online

Academic help online

4.10 Show that if the utility function is homothetic, then ICV IEV {Hint: use the result established in Exercise 2.6.]

4.11 Suppose an individual has Cobb-Douglas preferences given by those in Exercise 4.2.

1. Write down the consumer's cost function and demand functions.

2. The republic of San Serrife is about to join the European Union. As a consequence the price of milk will rise to eight times its pre-entry value. but the price
of wine will fall by fifty per cent. Use the compensating variation to evaluate the impact on consumers' welfare of these price changes.

3. San Serrife economists have estimated consumer demand in the republic and have concluded that it is closely approximated by the demand system derived in part 1.
They further estimate that the people of San Serrife spend more than three times as much on wine as on milk. They conclude that entry to the European Union is in the
interests of San Serrife. Are they right?

Academic help online

All Rights Reserved, usbestwriters.com
Disclaimer: You will use the product (paper) for legal purposes only and you are not authorized to plagiarize. In addition, neither our website nor any of its affiliates and/or partners shall be liable for any unethical, inappropriate, illegal, or otherwise wrongful use of the Products and/or other written material received from the Website. This includes plagiarism, lawsuits, poor grading, expulsion, academic probation, loss of scholarships / awards / grants/ prizes / titles / positions, failure, suspension, or any other disciplinary or legal actions. Purchasers of Products from the Website are solely responsible for any and all disciplinary actions arising from the improper, unethical, and/or illegal use of such Products.