Problem is to max U=u(L,Y) Subject to time constraint Y=w(24-L) • Solution Set lagrangian equation a (Y-w(24-L) Form the composite function Z=u(L,Y) - A (Y-w(24-L) • 1st order conditions for maximization requires: o dz/dL = o DZ/dY = o DZ/dk = • 2nd order conditions for maximization requires
Problem is to max U=u(L,Y) Subject to time constraint Y=w(24-L) • Solution Set lagrangian equation a (Y-w(24-L) Form the composite function Z=u(L,Y) - A (Y-w(24-L) • 1st order conditions for maximization requires: o dz/dL = o DZ/dY = o DZ/dk = • 2nd order conditions for maximization requires
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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Consumers satisfaction depends only on his income and leisure :
![• Problem is to max U=u(L,Y)
Subject to time constraint Y=w(24-L)
• Solution
Set lagrangian equation A (Y-w(24-L)
Form the composite function Z=u(L,Y) - A (Y-w(24-L)
• 1st order conditions for maximization requires:
o dz/dL =
o DZ/dY =
o DZ/dk =
• 2nd order conditions for maximization requires](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb274250-8938-4e54-b7b5-b9b9f1242271%2F95161581-f3bc-4077-8fa0-284a14218dc8%2Fra1ymsn_processed.png&w=3840&q=75)
Transcribed Image Text:• Problem is to max U=u(L,Y)
Subject to time constraint Y=w(24-L)
• Solution
Set lagrangian equation A (Y-w(24-L)
Form the composite function Z=u(L,Y) - A (Y-w(24-L)
• 1st order conditions for maximization requires:
o dz/dL =
o DZ/dY =
o DZ/dk =
• 2nd order conditions for maximization requires
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