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.

(c) Roy's identity is a major result in microeconomics having applications in consumer choice and the theory of the firm. The lemma relates the demand function to the derivatives of the indirect utility function. Specifcally, demand function for good i can be calculated as

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