Question: Suppose Ann has the Cobb-Douglass utility function over two goods u(a, b) = ln(a) + (1 ) ln(b). She is endowed with income/money m, and

Suppose Ann has the Cobb-Douglass utility function over two goods u(a, b) = ln(a) + (1 ) ln(b). She is endowed with income/money m, and faces prices pa and pb for the first and second good respectively.

Calculate each of the following:

a) Ann's Marshallian demand function

b) Ann's Indirect Utility

c) Ann's Hicksian Demand function

d) Ann's Expenditure function

e) verify that v(e) = u and e(v) = u for Ann

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