Posted by **Bob** on Thursday, March 19, 2009 at 7:32am.

If utility is U(x,y) = xy + y, what is the indirect utility function and expenditure function?

- Economics -
**economyst**, Thursday, March 19, 2009 at 5:31pm
The answer to this takes several steps (and beyond what I am willing to do here).

first, calculate MUx and MUy, noting that for maximization MUx/MUy = Px/Py

Second, solve for Px*X or Py*Y. Plug this into the budget constraint equation I=Px*X + Py*Y. Rearrange terms to get X (or Y) by itself. This will be X* or X when utility is maximized. Ditty for Y*. Plug this X* and Y* into your utility equation and you are done.

Repost, showing your work and I, or others will critique.

## Answer this Question

## Related Questions

- Economics - If utility is U(x,y) = x^0.3 y^0.7 (i.e x* = 0.3I/Px and y* = 0.7I/...
- economics - Suppose a person has a utility function U=YX. What is the minimum ...
- economics - 1.. Suppose that U(x; y) = min(x; y) with px = 1 and py = 1. ...
- Economics - Ive been stuck on this forever now if someone could please walk me ...
- microeconomics - Suppose a person has a utility function U=YX. What is the ...
- Micro econ - 1: Suppose John had a utility function of U=X^2/3Y^1/3 . Derive ...
- marketing - how are: goods services utility form utility place utility time ...
- economics - Consider a consumer who has an experienced utility function given ...
- economics math - Consider a consumer who has an experienced utility function ...
- economics - Suppose 15 peaches and 20 oranges need to be divided between fred ...