Essay
The indirect utility function for a consumer with a utility function U(x1, x2)is defined to be a function V(p1, p2, m)such that V(p1, p2, m)is the maximum of U(x1, x2)subject to the constraint that the consumer can afford (x1, x2)at the prices (p1, p2)with income m.
a.Find the indirect utility function for someone with the utility function U(x, y)= 2x + y.
b.Find the indirect utility function for someone with the utility function U(x, y)= min{2x, y}.Explain how you got your answers.
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a) m/(min{p1/2, p2}).Consumer...View Answer
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