Professional Documents
Culture Documents
Program Pascasarjana
Universitas Indonesia
Ilmu Ekonomi
Harry Patria
15 Maret 2016
Scope
3.1 Problem Exercises: Maximization Utility
3.2 Problem Exercises: Expenditure Minimization
3.3 Problem Exercises: Slutsky & Hicksian
3.4 Problem Exercises: Roys identity
Please explore:
a) Marshallian Demand
b) Indirect Utility
c) Hicksian Demand
d) Expenditure Function
e) Roys identity
f) Sheppard Lemma
g) Slutsky Equation
h) Substitution Effect
Tentukan:
a) berapa unit X dan Y?
b) Minimum expenditure?
c) Nilai dari lamda dan interpretasinya?
d) Intepretasi nilai lamda pada jawaban c?
3.3
3.3
3.3
3.3
3.3
3.3
3.3
Back to the problem: When the price ratio of X to Y had been 10/15, we
observed above that Y = .67 X and X = 1.5 Y. Now, with both prices equal to
$15, the price ratio is 1:1, and Y = X, meaning that the utility maximizing
bundle at the new relative price ratio on the original indifference curve must
have the same quantity of X and Y. Substitution allows the following result:
U = XY, but if X=Y, U = X 2 or original utility 166,665 = X 2 or X = 408.25 and Y
= 408.25. Note that on a graph, these would be the quantities at the
tangency point of the shifted budget line (with the higher relative price of X)
and the original indifference curve.
3.3
3.3
3.3
3.3
Exercise
Exercise
Exercise
Exercise
x
px
y0
x0
px
Then we draw
in the budget
constraint and
find the initial
equilibrium.
y0
px
dy
dx
py
x0
px
y0
x
px
px0
x0
y0
x1
px
px1
px0
x0
y0
px
px1
Dx
px0
x1
x0
y0
U2
U1
x1
px
x0
px1
px0
Dx
x1
x0
y0
U2
U1
x1 xH
px
x0
px1
px0
Dx
x1
x0
y0
U2
U1
px
x1 xH
x0
px1
px0
Dx
x1 xH x 0
y0
U2
U1
px
x1 xH
x0
px1
px0
Dx
Hx
x1 xH x 0
y0
U2
Notice that an
alternative
compensation
scheme would be to
give the consumer
enough income to
buy their original
bundle of goods x0yo
U1
px
x1 xH
x0
px1
px0
Dx
Hx
x1 xH x 0
U3
y0
U2
U1
px
x0
x1
px1
px0
Dx
Hx
x1 xH x 0
U3
y0
U2
U1
px
x1 xs x0
px1
px0
Dx
Hx
x1 xHxs x0
We call this xs . It is
the Slutsky demand.
U3
y0
U2
U1
px
x1 xs x0
px1
px0
Dx
xs
Hx
Sx
Summary
S
H
px
M
We
cannormal
derive three
demand
1.
The
Marshallian
2.
The
Hicksian
compensated
3.
The Slutsky
incomegood
Finally,
for
a basis
normal
curves
on
the
of our
demand
curve
demand
curve
where
agents
compensated
demand
curve
the
Marshallian
demand
indifference
curve
analysis.
are
given
sufficient
where
have
sufficient
curve
isagents
flatter
thanincome
the
to
maintain
theminonturn
their
income
towhich
purchase
their
Hicksian,
is
original
utility
curve.
original
bundle.
flatter than
the
Slutsky
demand curve.
Problems to consider
1.
2.
3.