2. Aggregation across goods Two ways Aggregate prices p=f(p)at first, and then maximize u on the budget px+qZ=w this is called Hicksian separability Maximize u on budget px+qz=w at first then aggregate quantities to get x=8(x) it's called functional separability2.Aggregation across goods • Two ways: • Aggregate prices at first, and then maximize U on the budget , this is called Hicksian separability. • Maximize u on budget at first, then aggregate quantities to get , it’s called functional separability. p f = ( ) p px w + = qzx g = ( ) x px qz + = w