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7. What is the household's optimization problem? Be clear about the following: (1) the objective function; (2) the choice variables; (3) the constraints if any.

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7. What is the household's optimization problem? Be clear about the following: (1) the objective function; (2) the choice variables; (3) the constraints if any. 8. Assume there is an interior solution to the household's problem. In the (c, (2") space, use indifference curves and the set of feasible Choices to find the solution to the household's optimization problem, i.e., the optimal choice of the household. 9. Based on your graph in the last question, write down the optimality conditions that must be satisfied at the household's optimal Choice. Briey explain why they must hold. (Hint: you should have two conditions.)

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