Question: Consider the following indirect utility function Km v(p, m) = PIP2 where K = a(1 - a)1-4, with 0 Consider the following indirect utility function

Consider the following indirect utility function Km v(p, m) = PIP2 where K = a"(1 - a)1-4, with 0

Consider the following indirect utility function v(p,m) = where K with O < < 1. Use Roy's identity to find the demand functions. Let nt 1. Derive the direct utility function u(p). Plug in the de- mand functions from Roy's identity to verify that u(p) is indeed the direct utility function corresponding to the indirect utility function v(p).

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