Question
Question Consider the utility function of the following form: (, ) = . The price of good x is $20 and good y is $10.
Question
Consider the utility function of the following form: (, ) = . The price of good x is $20 and good y is $10. Assume total expenditure on two goods cannot exceed $200.
a) Use the Lagrange method to determine the optimal consumption bundle. Show all working.
b) Verify the optimal consumption bundle in a) above satisfy the consumer equilibrium condition.
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Microeconomics Theory And Applications With Calculus
Authors: Jeffrey M. Perloff
4th Edition
134167384, 134167381, 978-0134167381
