00:03
Price and difference curve is a locus of the combination of the price of the two goods, which gave the same level of utility in the individual.
00:13
The utility function of the individual u .s.
00:18
Y, x, y, x, y, is equal to x.
00:26
Y to the power 0 .5.
00:30
Now, squaring both sides, i said this.
00:35
The budget constraint is given by i, is equal to p, x xx plus p y y the budget uh okay setting the leg range is equal to xy plus lambda i pxx plus p yyy the first order condition x equal to y minus px lambda equal to zero 2 derivative y is x minus p y and equal to 0.
01:30
Now step 2 is dividing equation 1 and 2, dividing equation 1 and 2, equal to 2, 2, 6.
01:52
Now we get y by x is equal to px by p y.
01:58
So y can be written as pxx by p y putting the value of y back into the budget pxx plus p x x by p y by p y equal to i from here we get x is equal to 1 by 2 p x since y equal to p x by p y substituting the value of x in this equation we take y equal to one with two y putting this putting this option of value of x and y in the utility function we get we get the indirect utility function so ux y is equal to x to the power 0 .5 y to the power 0 .5 .5 so from here we get b...