10 RATINGS IF YOU ANSWER IT CORRECT AND INFORMATIVE (NO MORE THAN 4 HOURS)

NO NEED TO ANSWER IT. (YOU WHO COMMENT). Firstly, Nobody told you or force you to get crazy and Secondly, I will demand whatever I want ! Btw somebody calmer and faster already answered that.

Pankaj is a junior web developer working for a major company. He divides his income between the consumption of goods 11, 13, and and paying his rent. He can afford to buy one unit of an by working for one hour, 1 unit of c, by working for two hours, and one unit of x3 by working for three hours. His rent costs him 40% of his income His utility function is given by: 1/2 1/2 1/2 Assuming that Pankaj works for 40 hours a week: i. Write down Pankaj's weekly budget constraint and briefly describe his maximisation problem; ii. Set up the Lagrangian and find how many of 2), 12, and r3 he would consume per week to maximise his well-being; ii. What is the interpretation of the Lagrange multiplier? What does it tell us in this particular example? iv. Imagine that the government raises a per-unit tax on good 2, which equals to 50% of its initial price. Discuss how this would change his optimal consumption levels of these three goods. v. Imagine that Pankaj gets a promotion and becomes as senior web developer, which increases his hourly wage by 50%. Dis- cuss how this would change his optimal consumption levels of these three goods