STSTEER

Duality of Hicksian Demand

Recognising that the cheapest way to reach the utility a consumer can afford is the bundle that maximises utility on the budget.

Question template

Part 1

Arjun has $income a year to spend on video games (good x) and cloud storage (good y). Arjun's utility per year is U(x, y) = ufunc, where x is the number of video games and y the number of terabyte-months of cloud storage. The price of video games is $px per game and the price of cloud storage is $py per terabyte-month; both can be bought in any fractional amount. To maximize Arjun's utility, which bundle should Arjun buy per year?

Part 2

Arjun buys video games (good x) and cloud storage (good y). Arjun's utility per year is U(x, y) = ufunc, where x is the number of video games and y the number of terabyte-months of cloud storage. The price of video games is $px per game and the price of cloud storage is $py per terabyte-month; both can be bought in any fractional amount. Arjun wants to reach a utility level of utility per year at the lowest possible cost. To do so, which bundle should Arjun buy per year?

Use it

from datasets import load_dataset
ds = load_dataset("narunraman/steer_me", "hicksian_duality")