Assignment:
Let
U(x,y) = x * (y^2)
Question 1. Derive the indirect utility function as a function of px, py and M, where px and py are respectively the prices of the two goods x and y, and where M is the consumer's income.
Question 2. Now calculate the level consumption of both goods and the level of utility achieved by this consumer if prices and income are as follows: px = 2; py = 3 ;M = 9
Question 3. Now set up the dual of this problem: minimize expenditure subject to the level of utility that you calculated in part 2 and with prices px and py. Find the expression for the expenditure function.