What is expenditure function, Microeconomics

Assignment Help:

What is Expenditure Function?

The Expenditure Function:

When preferences satisfy the local nonsatiation assumption, in that case v(p, m) will be strictly increasing into m. After that invert the function and resolve for m as a function of the level of utility; which is, given any level of utility, u, determine the minimal amount of income essential to attain utility u at prices p. The function which relates income and utility in this method the inverse of the indirect utility function is termed as the expenditure function and is denoted through e(p, u). Properly, the expenditure function is specified by the given problem:

e(p, u) = min px

that is u(x) > u.

The expenditure function specifies the minimum cost of getting a fixed level of utility.


Related Discussions:- What is expenditure function

International trade, compare and contrast adam smith''s theory of absolute ...

compare and contrast adam smith''s theory of absolute advantage theory and david ricardo''s comparative advantage theory of international trade.

#ttitl derivation of demand funcation, derivation of demand funcation usin...

derivation of demand funcation using indifferance curv ordelreay and competed demand curv

Elasticity of demand for gasoline - environmental services, Answer in True ...

Answer in True or Flees 1.  "Revealed preference methods for valuing environmental services and goods (for example hedonic price method, travel cost model, etc.) can reveal non-

Uses and habit forming commodity -price elasticity of demand, Uses and Habi...

Uses and Habit Forming Commodity -price elasticity of demand: The number of possible uses : A commodity has high price elasticity of demand (or elastic demand) if it can be p

Consumer preferences, Consumer Preferences Indifference curves represen...

Consumer Preferences Indifference curves represent all the combinations of market baskets which provide the same level of contentment to the person. Consumer Preferences

Microeconomics, determinants of demand and determinants of supply

determinants of demand and determinants of supply

Depreciation tax shield, Depreciation T ax Shield The decr...

Depreciation T ax Shield The decrease in corporate income taxes suitable to the deductibility of depreciation from the firm's taxable earnings.  Although depreciat

Uses of population census, Uses of population census: It is used to de...

Uses of population census: It is used to determine the size and the growth rate of the population at a country. The helps the government in planning for education, transporta

Explain capital intensive goods and primary products, What is main differen...

What is main difference between capital intensive goods and primary products?  Primary product means the major product in which the firm is dealing. Capital intensive good mea

Hello, using the indifference curve approach explain why the demand curve s...

using the indifference curve approach explain why the demand curve slope downwards from left to right...... is there any exceptions?

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