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If you could show the calculations! Thank you 1. {24 marks) Consider the utility function U = min{ax,, bx;}, where the price of x; 1s
If you could show the calculations! Thank you
1. {24 marks) Consider the utility function U = min{ax,, bx;}, where the price of x; 1s py, the price of x; 1s p; and consumer income 1s m. \fd. (2 marks) Calculate the consumer's new indirect utility function (1e, the consumer's new maximised utility as a function of py, p; and m). Assume that the consumer is offered the opportunity to return to the original prices, (py, p2), but offered a corresponding adjustment in their income, m m'', so that they can keep their new level of utility. \fNow assume that the consumer is offered the opportunity to stay at the new prices, (py, pz), but offered a corresponding adjustment in their income, m m', so that they can keep their original level of utility.Step by Step Solution
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