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-metric utility (et p) is elp, v(p,w)). on the choice of P. in consumer welfare from (p,w) to (p', w') elp, v(p',w')) - elp, v (p,w)). Indirect money This depends change Equivalent variation: EV = e(₁₁ v(p₁ ~')) - e(p, v (p₁w)) = e(p, v (p², w')) - w W

-metric utility (et p) is elp, v(p,w)). on the choice of P. in consumer welfare from (p,w) to (p', w') elp, v(p',w')) - elp, v (p,w)). Indirect money This depends change Equivalent variation: EV = e(₁₁ v(p₁ ~')) - e(p, v (p₁w)) = e(p, v (p², w')) - w W

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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please teach  explain step by step, I do not know notations, concept

Indirect This depends change in -metric utility (et p) is e(p, v(p,w)) The choice of P consumer welfare from (p,w) to (p', w') is elp, v (p',w')) - elp, v(p,w)). money Equivalent variation : EV = e(₁, v(p',~')) - e(p, v(p,w)) e(p, v (p', w')) = - W
Transcribed Image Text:Indirect This depends change in -metric utility (et p) is e(p, v(p,w)) The choice of P consumer welfare from (p,w) to (p', w') is elp, v (p',w')) - elp, v(p,w)). money Equivalent variation : EV = e(₁, v(p',~')) - e(p, v(p,w)) e(p, v (p', w')) = - W
Expert Solution
Step 1

Indirect money-metric utility (at p¯) is e(p¯,v(p,w)).

This depends on the choice of p¯.

Explanation:

The indirect, money-metric utility function is defined as

                          μp¯;p,w=ep¯,vp,w

where

     p=price vector

     p¯=arbitrary price vector

     w=income

p,w=demand

It is also called the indirect compensation function.

The money values depend on the choice of the arbitrary price vector p¯.

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