3. Show that the constant elasticity of substitution utility function U(x₁,x₂) = [α₂x₁° + α₂x²° ]¯½ is homogenous of degree one. Verify that Euler's theorem holds for this function.

Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter9: Multivariable Calculus
Section9.2: Partial Derivatives
Problem 48E
icon
Related questions
Question
Answer it fast please
3. Show that the constant elasticity of substitution utility function
U(x₁,x₂) = [α₂x₁° + α₂x²° ]¯½
is homogenous of degree one. Verify that Euler's theorem holds for this function.
Transcribed Image Text:3. Show that the constant elasticity of substitution utility function U(x₁,x₂) = [α₂x₁° + α₂x²° ]¯½ is homogenous of degree one. Verify that Euler's theorem holds for this function.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Recommended textbooks for you
Calculus For The Life Sciences
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage