# Suppose individuals require a certain level of food (X) and clothing

Suppose individuals require a certain level of food (X) and clothing (Y) to remain alive. Let this amount to be given by Xo and Yo and the individuals’ preferences are given by the following utility function: U(X,Y)= (X-Xo)”(Y-YO) where a + b = 1. a) Derive the Hicksian demand functions for X and Y and the Hicksian cost function. b) Prove that you may use Shephard’s lemma to derive the Hicksian demand functions b) Derive the indirect utility function and use Roy’s identity to derive the Marshallian demand functions.(Y) to remain alive. Let this amount to be given by Xo and Yo and the individuals’ preferences are given by the following utility function: U(X,Y)= (X-Xo)”(Y-YO) where a + b = 1. a) Derive the Hicksian demand functions for X and Y and the Hicksian cost function. b) Prove that you may use Shephard’s lemma to derive the Hicksian demand functions b) Derive the indirect utility function and use Roy’s identity to derive the Marshallian demand functions.