Question: Suppose that the individual's utility function is given by U(x1,x2)= x11/2+x21/2. Let p1 and p2 be the prices of good 1 and good 2 respectively.

Suppose that the individual's utility function is given by U(x1,x2)= x11/2+x21/2.

Suppose that the individual's utility function is given by U(x1,x2)= x11/2+x21/2. Let p1 and p2 be the prices of good 1 and good 2 respectively. The income is given by I. (a) Set up the Lagrangian function and derive the Marshallian demand functions for good 1 and good 2. (b) Derive the indirect utility function. (c) Verify that the marginal utility of income is the Langrangean multiplier. (d) Verify Roy's identity. Suppose that the individual's utility function is given by U(x1,x2)= x11/2+x21/2. Let p1 and p2 be the prices of good 1 and good 2 respectively. The income is given by I. (a) Set up the Lagrangian function and derive the Marshallian demand functions for good 1 and good 2. (b) Derive the indirect utility function. (c) Verify that the marginal utility of income is the Langrangean multiplier. (d) Verify Roy's identity

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