申論題

1. The majority of the study of economics in general consists of solving constrained op- timization problems. In microeconomics, usually a consumer is assumed to be with a set of preferences which can be represented by a utility function. This utility function "measures" how happy she is at any level of consumption of the goods that provide her with satisfaction.

(b) u(p₁, p₂,w), the indirect utility function, gives Crystal's maximal attain-able utility when faced with (Pi, P2), the vector of goods prices, and w, the amount of income:
(p₁,p₂,W) =u[x₁(p₁,p₂,W),x₂(p₁,p₂,w)].
Write down the indirect utility function of Crystal. That is, plug in your answers of (a) into the quasi-linear utility function.