What is expenditure function, Microeconomics

Assignment Help:

What is Expenditure Function?

The Expenditure Function:

When preferences satisfy the local nonsatiation assumption, in that case v(p, m) will be strictly increasing into m. After that invert the function and resolve for m as a function of the level of utility; which is, given any level of utility, u, determine the minimal amount of income essential to attain utility u at prices p. The function which relates income and utility in this method the inverse of the indirect utility function is termed as the expenditure function and is denoted through e(p, u). Properly, the expenditure function is specified by the given problem:

e(p, u) = min px

that is u(x) > u.

The expenditure function specifies the minimum cost of getting a fixed level of utility.


Related Discussions:- What is expenditure function

Bains theory, what is bains theory ? describe with the diagram

what is bains theory ? describe with the diagram

Explicit costs are accounting costs, An economist's view of costs contains ...

An economist's view of costs contains both explicit and implicit costs.  Explicit costs are accounting costs, and implicit costs are the opportunity costs of an allocation of resou

Xbox games demanded, Think about the demand for the three popular game cons...

Think about the demand for the three popular game consoles: XBox, PS3, and Wii. What is the effect on the demand for XBox games and the quantity of XBox games demanded if, other th

Demand, brife note on demand

brife note on demand

Describe the features of monopolistic competition, It is important to under...

It is important to understand the important characteristics of monopolistic competition. The knowledge of these features will enable the students to know how this form of market st

#ttitl derivation of demand funcation, derivation of demand funcation usin...

derivation of demand funcation using indifferance curv ordelreay and competed demand curv

Mixed economics, Mixed Economic System and how can this system solve the ec...

Mixed Economic System and how can this system solve the economic problem, with example?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd