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Unformatted text preview: ) = p 1 h 1 ( p 1 , p 2 , u ) + p 2 h 2 ( p 1 , p 2 , u ) Expenditure functions 2 Properties of expenditure functions E ( p 1 , p 2 , u ) = p α 1 p 1α 2 u ( 1α ) 1α α α Property 1 : HD1 in prices Property 2 : increasing in prices Property 3 : increasing in utility Property 4: Shephard’s Lemma ∂ E ( p 1 , p 2 , u ) ∂ p 1 = h 1 ( p 1 , p 2 , u ) Expenditure functions and Indirect utility functions E ( p 1 , p 2 , u ) = p α 1 p 1α 2 u ( 1α ) 1α α α V ( p 1 , p 2 , I ) = α α ( 1α ) 1α I p α 1 p 1α 2 Indirect utility functions and Expenditure functions E ( p 1 , p 2 , u ) = p α 1 p 1α 2 u ( 1α ) 1α α α V ( p 1 , p 2 , I ) = α α ( 1α ) 1α I p α 1 p 1α 2...
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 Fall '09
 CUR
 Microeconomics, Utility, Roy, Monotonic function, Roy's identity

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