The Indirect Utility Function for a Consumer with a Utility

question 26

Essay

The indirect utility function for a consumer with a utility function U(x₁, x₂) is defined to be a function V(p₁, p₂, m) such that V(p₁, p₂, m) is the maximum of U(x₁, x₂) subject to the constraint that the consumer can afford (x₁, x₂) at the prices (p₁, p₂) with income m.
a. Find the indirect utility function for someone with the utility function U(x, y) = 2x + y.
b. Find the indirect utility function for someone with the utility function U(x, y) = min{ 2x, y}. Explain how you got your answers.

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Definitions:

American Psychological Association

A professional organization representing psychology in the United States, promoting research, education, and clinical practice in the field.

William James

An American philosopher and psychologist, often referred to as the father of American psychology, known for his contributions to functionalism.

Margaret Floy Washburn

A prominent early American psychologist known for her work in animal behavior and motor theory development.

Mary Whiton Calkins

An early American psychologist who became the first woman to serve as President of the American Psychological Association.