Question: 7 . 4 . Consider the indirect utility function given by v ( p 1 , p 2 , m ) = m p 1

7.4. Consider the indirect utility function given by
v(p1,p2,m)=mp1+p2
(a) What are the demand functions?
(b) What is the expenditure function?
(c) What is the direct utility function?
7.5. A consumer has a direct utility function of the form
U(x1,x2)=u(x1)+x2.
Good 1 is a discrete good; the only possible levels of consumption of good 1 are x1=0 and x1=1. For convenience, assume that u(0)=0 and p2=1.
(a) What kind of preferences does this consumer have?
(b) The consumer will definitely choose x1=1 if p1 is strictly less than what?
(c) What is the algebraic form of the indirect utility function associated with this direct utility function?
7 . 4 . Consider the indirect utility function

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