Question: Economic PROBLEM. 1 A. Why is an utility function called indirect utility function (IUF)? Explain it and give an example how do you get the

Economic

PROBLEM. 1 A. Why is an utility function called indirect utility function (IUF)? Explain it and give an example how do you get the IUF stepbystep. What is the direct utility function from your example? (You may use any functional form that you like with twogoods example). (30) B. What is your expenditure function from number 1.A. Check whether your expen diture funtion is homogeneous of degree one. Also, check Whether you expenditure function is nondecreasing in prices. (20)

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