高级微观经济学(上海财经大学_陶佶)note04.pdfVIP

2005 年秋季 高等微观经济学I 间接效用和支出 Lecture Note 4 – Indirect Utility and Expenditure 1. The Indirect Utility Function The ordinary utility function, u x , is also called as the direct utility function. Given price ( ) vector p and income y , the consumer chooses an optimal consumption bundle x p ,y to ( ) achieve the highest level of utility allowed by his budget constraint. The relationship among price vector, income, and the maximized value of utility can be summarized by a real-valued function n defined as follows: v : × → + + v p, y max u x s.t. pix ≤y. ( ) x ∈n ( ) + The function v p, y is called the indirect utility (IU) function. ( ) Question: Under which conditions the IU function exists and is unique? If u x is continuous, p 0 and y ≥0 , there exists at least a solution to the ( ) maximization problem. (Why?) If u x is strictly quasiconcave, then the solution is unique. (Why?) ( ) Hence, v y is well-defined when x p ,y is chosen for given price vector and income. ( ) ( ) v p, y u x p, y . ( ) ( ( )) 2. Properties of the Indirect Utility Function Theorem 1. Let n u x be continuous and strictly increasing on . Then v p,