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Can this be answered please? A consumer is maximising her utility function: U(x, y) = (205 + 10.5)2 subject to the budget constraint 4x +
Can this be answered please?
A consumer is maximising her utility function: U(x, y) = (205 + 10.5)2 subject to the budget constraint 4x + 2y = 108. (a) Set up the Lagrangian function of this utility maximisation problem and derive the first-order conditions. (b) What are the utility maximizing amounts of r and y? Also, calculate the Lagrange multiplier. (c) What are the utility maximising amounts of a and y if the budget constraint changes to r + 2y = 36? How would A change? Explain your reasoning. (Hint: You do not need to calculate A, rather comment on how it would change and why.)Step by Step Solution
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