Gross national income per capita of different countries of the world varies a good deal and further that there exists a large income or development gap between the developing and the developed countries. It is important to explain how income inequalities between various countries in the world economy are exactly measured. However, methods of measuring income inequalities between countries are [...]
The utility of x can be written as u(x). It is continuous and strictly increasing on Rn+. There are six properties of the indirect utility function. Such properties are explained along with proof as follows: Property 1: Continuous on Rn++ * R+: Proof: The utility of x, u(x) is a continuous function. There might be the change in the income [...]
Suppose all prices and the consumer's income change in the same direction and in the same proportion. What will be the effect of such a change on the equilibrium purchase plan of a consumer? The objective of the consumer is to maximise utility (u) subject to the budget constraint: Expenditure aggregated over all goods = income or, pixi = y. [...]