Question
Larry has preferences U c (X1, X2) = ( X1 + 2) 2 x (X2+3). He has income m and faces prices P1 and P2
Larry has preferences Uc (X1, X2) = ( X1 + 2)2 x (X2+3). He has income m and faces prices P1 and P2 for goods 1 and 2 respectively. Find his optimal consumption bundle. (assume an interior solution)
a. X*1 = 2m + 6P2 - 2P1 /3P1 , X*2 = m+2P1 - 6P2/3P2
b. X*1 = 2m + 2P2 - 6P1 /3P1, X*2 = m+6P1-2P2/3P2
c. X*1 = 2m-6P2+2P1 /3P1, X*2 = m-2P1+6P2/3P2
d. X*1 = 2m-2P2+6P1 /3P1, X*2 = m-6P1+2P2/3P2
e. none of these options
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Austro-corporatism Past, Present, Future
Authors: Gunter Bischof
1st Edition
1000675858, 9781000675856
