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Topic: 1.55 (a), 1.57, 1.58
Conf: Chapter 1, Consumer Theory, Msg: 11617
From: Kiriya Kulkolkarn (jornson@hotmail.com)
Date: 10/4/2002 07:48 PM
1.55 (a), 1.57, 1.58 Kiriya Kulkolkarn jornson jornson@hotmail.com
For 1.57,
1. Give e(p,u), we can find v(p,y).
2. Use Roy's Identity to find x(p,y).
3. Differentiate x(p,y) w.r.t y and multiply the result by y/x to get income elasticity.
4. The result is a bit messy but don't worry!
5. Divide numerator and denominator by y.
6. Take limit as y approaches o and infinity, respectively.
7. Done!!!
Hope this helps.