Unformatted text preview: = ∂ 2. What is an indirect or value function? (you can use the notation in 1. to explain if you wish) If x 1 * and x 2 * satisfy the first order conditions, the indirect or value function is * * 1 2 ( , , ). f x x z Example. In the example * 1 500 , x z = and * 2 100. x = The indirect or value function is 2 2 100 (500 ) .1(500 ) 200(100) 1(100) y z z z =+...
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 Winter '08
 Showalter,M
 Economics, Optimization, Endogenous growth theory

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