Determine the indirect utility function in brief, Microeconomics

Assignment Help:

Determine the indirect utility function in brief.

Indirect Utility Function:

The ordinary utility function, u(x), is described over the consumption set X and thus to as the direct utility function. Specified prices p and income m, the consumer selects a utility-maximizing bundle x(p, m). There level of utility achieved while x(p, m) is chosen hence will be the highest level permitted through the consumer’s budget constraint facing p and m, and can be denoted through

v(p, m) = max u(x)

that is px = m.

The function v(p, m) which gives us the maximum utility attainable at specified prices and income is termed as the indirect utility function and therefore this is a compose function of u(•) and x(p, m), which is,

v(p, m) = u(x(p, m)).


Related Discussions:- Determine the indirect utility function in brief

Role of infrastructure in the economy, ROLE OF INFRASTRUCTURE IN THE ECONOM...

ROLE OF INFRASTRUCTURE IN THE ECONOMY: Economic Infrastructure produces services that directly facilitate and are basic to the carrying out of a wide variety of economic activ

Game theory, The following represents the potential outcomes of your first ...

The following represents the potential outcomes of your first salary negotiation after graduation: Assuming this is a sequential move game with the employer moving first, indicate

Discuss the advantages and disadvantages of rate regime, Discuss the advant...

Discuss the advantages and disadvantages in having a managed exchange rate regime. Advantages of a managed/fixed exchange rate Predictability and certainty a) Fi

Friedmans modern quantity theory, QUESTION 1 : What distinguishes Keynes...

QUESTION 1 : What distinguishes Keynes' Liquidity preference Framework from Friedman's Modern Quantity Theory? QUESTION 2: Analyse the monetary policy tools that the Cen

Cost considerations for managers, Some Cost Considerations for Managers ...

Some Cost Considerations for Managers * Three guidelines for estimating the marginal cost(MC): 1) Average variable cost should not be used as substitute for the marginal cost(

Political economy, Consider the model of corruption explored by Shleifer an...

Consider the model of corruption explored by Shleifer and Vishni’s where there is one government-produced good X. There is a demand for that good described by the inverse demand eq

Production, explain the concept economies/diseconomies of scale and minimum...

explain the concept economies/diseconomies of scale and minimum efficient scale

How do we obtain total cost curve, Total cost curve (TC) is obtained by add...

Total cost curve (TC) is obtained by adding up vertically total fixed cost and total variable cost curves because the total cost is sum of total fixed cost and total variable cost

Determinants of private demand - gender , Determinants of Private Demand - ...

Determinants of Private Demand - Gender Hypothetically, let us consider a family with two children, a boy and a girl. Let it be that both of them qualify in an entrance exami

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd