For this question, consider that the letter "A" denotes the last 4 digits of your student number. That is, for example, if your student number is: 12345678, then A = 5678. Suppose that the consumer has a utility function given by U(X,Y)= X0,2y0,8 The prices of goods X and Y are given by px=4 TL and py=2 TL. The total budget the consumer has is given by I = A TL. a. Write down the consumer's optimization problem (formally, as we wrote in the lectures). b. Apply the Lagrangian method. Find the necessary condition (NC) for the consumer's optimization problem. Then find the values of X and Y that maximize consumer's utility. c. Illustrate your results by using a graph.

For this question, consider that the letter "A" denotes the last 4 digits of your student number. That is, for example, if your student number is: 12345678, then A = 5678. Suppose that the consumer has a utility function given by U(X,Y)= X0,2y0,8 The prices of goods X and Y are given by px=4 TL and py=2 TL. The total budget the consumer has is given by I = A TL. a. Write down the consumer's optimization problem (formally, as we wrote in the lectures). b. Apply the Lagrangian method. Find the necessary condition (NC) for the consumer's optimization problem. Then find the values of X and Y that maximize consumer's utility. c. Illustrate your results by using a graph.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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