Question

Given preferences over x and y , $u(x,y)=xy$ , the expenditure function corresponding to utility level U and prices $p_{x}$ and $p_{y}$ is given by $A(Up_{x}p_{y})^{0.5}$ . What is A?

Answer 1

ular,y)= At optimal ay Coundle, bu 2 x 2 2 Py is income Put x and y in ulay) uay) - 6 ). Yulx Py = m2 m=A - Expendituse I function,

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