Explain the duality between direct and indirect utility, Microeconomics

Assignment Help:

Explain about the duality between direct and indirect utility.

Duality between Direct and Indirect Utility:

While seen how one can recover an indirect utility function by observed demand functions through solving the integerability equations. Now see how to resolve for the direct utility function.

The answer demonstrates quite nicely the duality between direct and indirect utility functions. This is most convenient to define the computations in terms of the normalized indirect utility function, there prices divided by income therefore expenditure is identically one. Hence the normalized indirect utility function is specified by

v(p) = maxx u(x)

that is px = 1


Related Discussions:- Explain the duality between direct and indirect utility

Determine the efficient amount of refrigerant, The marginal benefit of a re...

The marginal benefit of a refrigerant in a production process (the producer's willingness to pay for its use) is 100-5Q.  The marginal damage from the use of the refrigerant on the

Integrability, explain about integrability problem

explain about integrability problem

Economic reforms and industrial growth, Economic Reforms and Industrial Gro...

Economic Reforms and Industrial Growth Economic reforms were mainly intended to remove obstacles so that investment in industry may be accelerated. With this end in view, indu

Role of monetary policy, Q. Role of Monetary Policy? Monetary Policy: M...

Q. Role of Monetary Policy? Monetary Policy: Monetary policy reflects the use by government and government agencies (mainly the central bank) of interest rate adjustments and o

Measures used to restrict international trade, Measures used to restrict In...

Measures used to restrict International Trade: These are taxes imposed on traded commodities as they cross national boarders. These are two main types of tariffs. An import ta

Explain about the optimal consumption rule, Explain about the optimal consu...

Explain about the optimal consumption rule. The optimal consumption rule: While a consumer maximizes utility, the marginal utility per dollar spent should be similar for all

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