Consider the maximization model: F(x 1 , x 2 , x 3 , x 4 )=x 1
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Question:
Consider the maximization model:
F(x1, x2, x3, x4)=x12x22 +x3x42+a1x1 +a2x2 -x3+a4
subject to x1+ x2- a3x3+ a4x4=0
a) Write out all the first and second-order conditions. (You do not need to solve these conditions.)
b) What does the maximization problem itself tell us about the signs of each of the
following partial derivatives
dx1/da1
dx2/da2
dx3/da3
dx4/da4
note: (a) means Alpha.
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