Question
Assume a consumer with the utility function U = U(X, Y) = X 2 Y 2 and the typical budget constraint M = P x
Assume a consumer with the utility function U = U(X, Y) = X2Y2and the typical budget constraint M = PxX + PxY
a. Set up the constrained maximization problem and derive the first-order conditions.
b. Derive the consumer's demand for X and Y in terms of the parameters
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Macroeconomics Policy And Practice
Authors: Frederic Mishkin
2nd Edition
0133424316, 978-0133424317
