Question: 2. [11 pts] A consumer has a utility function u(C1, 12, ..., In) which is continuous, increasing and locally non-satiated. Define his expenditure function and

2. [11 pts] A consumer has a utility function u(C1, 12,

2. [11 pts] A consumer has a utility function u(C1, 12, ..., In) which is continuous, increasing and locally non-satiated. Define his expenditure function and prove that it is concave in prices i.e. if p and p' are two price vectors, and A e (0, 1), then e(Ap + (1 - X)p', uo) 2 Xe(p, uo) + (1 - X)e(p', uo)

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