Question
Suppose Constant Elasticity of Substitution utility function for a consumer is given by U(X,Y) = X^2 + Y^2 a) Find the indirect utility function (V)
Suppose Constant Elasticity of Substitution utility function for a consumer is given by U(X,Y) = X^2 + Y^2
a) Find the indirect utility function (V)
b) What is the degree of homogeneity of the indirect utility function derived in part (a) for prices and income?
c) What is the relationship between income and indirect utility?
d) What is the relationship between the prices of goods and indirect utility?
e) Find the expenditure function of this consumer.
f) What is the degree of homogeneity of the expenditure function derived in part (e) for goods prices?
g) What is the relationship between each prices and expenditure function?
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