True-False Questions1. If e*(p,U) be the value function for theexpenditure minimization problem, and v*(p,M) be the value function for the utilitymaximization problem. Then by duality, v*(p,e*(p,U))=M.2. Let x* is the ordinary (Marshallian) demandfunction for the vector of consumption goods,and preferences are strictly monotonic, thenx* is the demand function that solves theexpenditure minimization problem at fixedutility level U= value function e*(p,U).3. In the Slutsky equation, the Substitutioneffect with respect to an "own-price" changeis always negative.4. If preferences are strictly convex and strictlymonotonic, then necessarily ordinary demandchoices are unique.5. If preferences are convex, then ordinarydemand function cannot be unique at anyprice-income pairs.

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True-False Questions 1. If e*(p,U) be the value function for the expenditure minimization problem, and v* (p,M) be the value function for the utility maximization problem. Then by duality, v* (p,e*(p,U))=M."

True-False Questions 1. If e(p,U) be the value function for the expenditure minimization problem, and v (p,M) be the value function for the utility maximization problem. Then by duality, v* (p,e*(p,U))=M."

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.9P

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The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

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