8/ A consumer has the following utility function: u (x, y) = 6xy + 10 a) Determine the marginal utility for the two commodities. b) The consumer has a budget of $ 90. A unit of the 1rst commodity costs $ 10 and a unit of the second $ 20. Write down the budget equation. c) The consumer wants to maximize his utility subject to his budget constraint. Write down the Lagrangian for this problem.

8/ A consumer has the following utility function: u (x, y) = 6xy + 10 a) Determine the marginal utility for the two commodities. b) The consumer has a budget of $ 90. A unit of the 1rst commodity costs $ 10 and a unit of the second $ 20. Write down the budget equation. c) The consumer wants to maximize his utility subject to his budget constraint. Write down the Lagrangian for this problem.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

Question

please solve Q8

8 / A consumer has the following utility function:
и (х, у) — 6ху + 10
a) Determine the marginal utility for the two commodities.
b) The consumer has a budget of $ 90. A unit of the 1rst commodity costs $ 10 and a unit of the second
$ 20. Write down the budget equation.
c) The consumer wants to maximize his utility subject to his budget constraint. Write down the
Lagrangian for this problem.
d) Calculate the Irst and 2nd order conditions for a critical point of the Lagrangian function.

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