Question
Using the Lagrangean multiplier technique, solve for the following quantities for a consumer with utility function u(x1,x2)=x1 a x2 b , a,b>0. 1. The demand
Using the Lagrangean multiplier technique, solve for the following quantities for a consumer with utility function
u(x1,x2)=x1ax2b, a,b>0.
1. The demand curves x1*(p1, p2, w) and x2*(p1, p2, w).
2. The utility value of money, V (p1, p2, w) = u(x1*(p1, p2, w), x2*(p1, p2, w)).
3. The marginal value of money, V (p1, p2, w)/w.
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Environmental Economics
Authors: Stephen Smith
6th Edition
0199583587, 9780199583584
