Suppose a consumer’s utility function u is given by u(x) = x1 x22 where x1 and x2 are amounts of two commodities consumed a) Find the utility-maximing demand for x1 and for x2. b) Are the second-order sufficient conditions for a maximum satisfied?

Suppose a consumer’s utility function u is given by u(x) = x1 x22 where x1 and x2 are amounts of two commodities consumed a) Find the utility-maximing demand for x1 and for x2. b) Are the second-order sufficient conditions for a maximum satisfied?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(b) U(x, y) = min [ax, y]
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