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Unformatted text preview: expenditure function, B = B ( p x , p y , U ) Interpret this expression. Find B / p x and B / p y . Skips maximization problem could be recast as the following minimization problem: p x x + p y y s.t. U = x ( y + 1) e) Write down the lagrangian for this problem. f) Find the values of x and y that solve this minimization problem and show that the values of x and y are equal to the partial derivatives of the expendi-ture function, B / p x and B / p y respectively. (Hint: use the indirect utility function) 1...
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This note was uploaded on 09/13/2009 for the course EOCNOMICS Econ 331 taught by Professor Kelvinkwainger during the Spring '09 term at Simon Fraser.
- Spring '09