Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Prove that when indirect utility functions of all consumers i = 1, .... , n have the Gorman form: v i (p; w) = a
Prove that when indirect utility functions of all consumers i = 1, .... , n have the Gorman form:
vi(p; w) = ai(p) + b(p)wi
and the social welfare function is utilitarian:
W (ui, ...., un) = (from i to n) ui
then for any wealth distribution aggregate demand can always be viewed as being generated by a normative representative consumer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started