Question: Consider a consumer whose indirect utility function is represented by (Pl.P2, m) = m Pi + Pa (a) 1. What are the (Marshallian) demand

Consider a consumer whose indirect utility function is represented by (Pl.P2, m) = m Pi + Pa (a) 1. What are the (Marshallian) demand functions? (30 marks] ii. What is the expenditure function? [10 marks] iii. Provide a direct utility function for the consumer. [15 marks] (b) Now suppose that the indirect utility function is given by m v(pr. pr. m) = min(P.pa)" i. What are the demand functions? [30 marks] ii. Provide a direct utility function for this consumer. [15 marks]

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a i The Marshallian demand functions are x1P1 P2 m 1 x2P1 P2 m 1 These demand functions are constant and do not depend on the prices or income of the ... View full answer

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