Question

properties of expenditure function​

Answer 1

Answer:

In microeconomics, the expenditure function gives the minimum amount of money an individual needs to spend to achieve some level of utility, given a utility function and the prices of the available goods.

Answer 2

Properties of expenditure function​

• Expenses that are fixed include monthly payments like rent or mortgages where the amount is always the same.
• The timing and/or amount of spending will change in an irregular expenditure.
• Non-essential spending, sometimes known as spending on wants as opposed to needs, is referred to as discretionary spending.
• In microeconomics, the expenditure function, given a utility function and the prices of the available commodities, calculates the least amount of money a person must spend to acquire a certain level of utility.
• Consumption by families, corporate investment, government spending on goods and services, and net exports—which are equal to exports minus imports of goods and services—are the four primary aggregate expenditures that go into calculating GDP.
• Economic stability: Upholding economic stability is a goal of governmental spending. In times of inflation or deflation, government involvement is crucial. Under the market system, economic stability can be restored. Therefore, the government must either raise taxes or cut spending.

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