Question
a)Find the indirect Utility function V(I, Px, Pv)[replace the constant term (which will be a complicated function of a) with K. b)Calculate the expenditure function
a)Find the indirect Utility function V(I, Px, Pv)[replace the constant term (which will be a complicated function of a) with K.
b)Calculate the expenditure function E(U, Px, Pv).
c)Now calculate the compensated demand curves.
d)Use the Slutsky equation
U = x^a y^1-a .
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Heres the solution for the consumer problem with the CobbDouglas utility function a Indirect Utility Function VI Px Pv We can find the indirect utilit...
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
