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2) The consumer has the utility function u = 2^x}-a

Economics

2) The consumer has the utility function u = 2^x}-a. Find her indirect utility function. Confirm Roy's identity by: a. Differentiating the indirect utility function with respect to the price of good 1; b. Using the first-order conditions to obtain solutions for X1 and , and therefore an expression for - 221; c. Showing that (a) and (b) give the same result.

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