For a strictly increasing differentiable , consider and . What guarantees existence of continuously differentiable demand functions solving these for all positive ?
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For a strictly increasing differentiable , consider and . What guarantees existence of continuously differentiable demand functions solving these for all positive ?
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For a strictly increasing differentiable u:ℝ²→ℝ, consider (D₁u(x₁,x₂))/(D₂u(x₁,x₂))=p₁/p₂ and p₁x₁+p₂x₂=w. What guarantees existence of continuously differentiable demand functions x₁(p₁,p₂,w),x₂(p₁,p₂,w) solving these for all positive p₁,p₂,w? (A) u is injective (B) u is bijective (C) u is twice continuously differentiable (D) u is twice continuously differentiable and the relevant Jacobian matrix [[D₁₁u p₂-D₁₂u p₁ D₁₂u p₂-D₂₂u p₁; p₁ p₂]] is nonsingular
Also written as: For a strictly increasing differentiable u:R^2->R, consider (D_1u(x_1,x_2))/(D_2u(x_1,x_2))=p_1/p_2 and p_1x_1+p_2x_2=w. What guarantees existence of continuously differentiable demand functions x_1(p_1,p_2,w),x_2(p_1,p_2,w) solving these for all positive p_1,p_2,w?
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This question is on Implicit functions, level curves and second-order conditions, part of Multivariable calculus in Mathematics.
Slopes of level curves and implicit functions, and conditions for optima in two variables.
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Question from the DSE 2015 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.