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Suppose that u(x) is a linear homogeneous utility function. (a) Show that the expenditure function is multiplicatively separable in p and u and can be
Suppose that u(x) is a linear homogeneous utility function.
(a) Show that the expenditure function is multiplicatively separable in p and u and can be written in the form e(p, u) = e(p, 1)u.
(b) Show that the marginal utility of income depends on p, but is independent of y.
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