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Consider the indirect utility function: a. b. C. d. e. f. V(P1, P2,m)= m 2p P2 Show that the indirect utility function is homogeneous
Consider the indirect utility function: a. b. C. d. e. f. V(P1, P2,m)= m 2p P2 Show that the indirect utility function is homogeneous of degree 0 in prices and income. Derive the expenditure function. Show that the expenditure function is homogeneous of degree 1 in prices. Derive the Marshallian demand function for good 2. Derive the Hicksian demand function for goods 1 and 2. Show/describe/interpret how the compensated demand functions for good 1 and for good 2 are shifted by a change in the price of the other good, noting the symmetry.
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