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A2. A consumer has a Stone-Geary utility function U(x, X2) = b, In(x, -q) + b, In(x2 -C2) (* > q ,* 2 >C2) where

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A2. A consumer has a Stone-Geary utility function U(x, X2) = b, In(x, -q) + b, In(x2 -C2) (* > q ,* 2 >C2) where x, denotes the consumption of the i-th commodity and b1,b2,c1 and c2 are positive constants. The price of the i-th commodity is p; and the consumer's income, m, is such that m > PatP252 Express the consumer's problem as a constrained maximisation problem. Explain the significance of the condition (*). Write down the Lagrangian for the problem and use it to find the demand functions. State the optimal value of the Lagrange multiplier. Find the indirect utility function V(P1, P2, m) and find OV/am. Comment

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