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Problem 2. (a) (15 points) Solve the utility maximizing problem (assume m 2 4). Find mm) and 553(m). 1 1 min U(.'L'1,$2) = a 111(1
Problem 2. (a) (15 points) Solve the utility maximizing problem (assume m 2 4). Find mm) and 553(m). 1 1 min U(.'L'1,$2) = a 111(1 + $1) + 1111(1'l' 132) {131,332 subject to 23:1 + 3:52 = m. (b) (15 points) Find U *(m), which is the indirect utility function. Show that '35; = A, where A is the Lagrange multiplier. Interpret the economic meaning of A
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