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What is form of the expenditure function for this consumer

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1. Consider preferences defined over the nonnegative orthant by (x1, x2) >- (y1, y2) if x1 + x2 < y1 + y2. Do these preferences exhibit local nonsatiation? If these are the only two consumption goods and the consumer faces positive prices, will the consumer spend all of his income? Explain.

2. A consumer has a utility function u(x1, x2) = max{x1, x2}. What is the consumer's demand function for good 1? What is his indirect utility function? What is his expenditure function?

3. A consumer has an indirect utility function of the form

v(p1, p2, m) = m/min{p1, p2}

What is the form of the expenditure function for this consumer? What is the form of a (quasiconcave) utility function for this consumer? What is the form of the demand function for good 1?

4. Consider the indirect utility function given by

v(p1, p2, m) = m/p1+p2

(a) What are the demand functions?

(b) What is the expenditure function?

(c) What is the direct utility function?

Reference no: EM131698067

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