Questions tagged [ces]
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5
questions
3
votes
1answer
86 views
The Intuition of CES Utility
Suppose a (symmetric) CES utility function $$U(\mathbf{x})=\left[\int_{\Omega}\left(x_{\omega}\right)^{\frac{\sigma-1}{\sigma}} d \omega\right]^{\frac{\sigma}{\sigma-1}}, \sigma>1$$
1 The indirect ...
1
vote
0answers
48 views
Derivation of wage rate from nested CES production function
could anyone please help to explain how equation (4) in this paper is derived? I understand that it's an application of first order conditions using the chain rule from equations (1)-(3), but the ...
2
votes
0answers
21 views
An Extension to CES Demand
I am reading a paper with an extended CES final good setting:
The representative household consists of a continuum of members, indexed by $k$
$C_{t}=\int C_{k, t} d k$
$C_{k, t}=\left(\int_{j \in \...
2
votes
1answer
309 views
Cost function from CES production function
How can I find the cost function $c(w,p)$ given that the production is
$$ f(x)=(x_1^p + x_2^p)^{1/p} \ \ for\ \ 0<p <1 $$
I tried to solve it and found that
$$TC(y) = \left\{
\begin{...
1
vote
1answer
73 views
Marshall demand for simple CES utility
Assume that preferences are given by a utility function is given
$$u(x_1,x_2) = (x_1^\rho + x_2^\rho)^{1/\rho}$$
what then are the Marshall demand given budget constraint
$$p_1x_1 + p_2x_2 \leq I$$
