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

Describe classical economics, Q. Describe Classical Economics? Classica...

Q. Describe Classical Economics? Classical Economics:Tradition of economics which began with Adam Smith and continued with other theorists including Thomas Malthus, David Ricar

Explain about oligopolistic market, How might a firm in an oligopolistic ma...

How might a firm in an oligopolistic market attempt to increase market share? Explanation of oligopoly; concentration ratio, producer sovereignty Explanation that oligopolie

Change in consumer taste, Change in consumer Taste/preference: Any chang...

Change in consumer Taste/preference: Any change in consumer taste or preference causes demand to change. Increased taste or preference for a particular good causes demand to inc

Explain the terms inflation and deflation, Discuss whether inflation or def...

Discuss whether inflation or deflation is the more serious problem for an economy. Inflation is a consistent general enhance in the price level, whereas deflation is a consiste

Subject matter of economics, Ask factor affects elasticity of demandquestio...

Ask factor affects elasticity of demandquestion #Minimum 100 words accepted#

Due diligence, Due Diligence The investigative procedure an investor s...

Due Diligence The investigative procedure an investor should conduct into the operations and business strategy assumptions of an organization soliciting investors.

Define the adoption of economic institutional arrangement, Define the adopt...

Define the adoption of economic institutional arrangement in analytical frameworks. Adoption of Economic Institutional Arrangement: The third step for studying an economi

Endowendowment, How to solve questions of endowments?

How to solve questions of endowments?

Axioms - revealed preference theory, Axioms: Revealed preference theor...

Axioms: Revealed preference theory is based on the axioms listed below.  •  Consumer will spend all her income on goods. The consumer equilibrium always remains on the budg

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