Exercise 1 Consider utility maximization problem: Kuhn Tucker Theorem max U (x1, x2) = x1+x2 21,22...

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Question

Exercise 1 Consider utility maximization problem: Kuhn Tucker Theorem max U (x1, x2) = x1+x2 21,22 subject to Tị 2 0, r2 > 0,

Answer 1

Answer #1

Grinen utility function; WX1,X2) = xx+X2 %3D budget Constrait maximization prroblem; Pixit P2x2 = I 2u+x2 ul X1, x2) = 4,22 Q

utility of good r2; Manginal MUx2 %3D ax2 Now should spend au incomeon X2 I Connen áo lution] Should spend au in come on X1 [

Answer 2

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