You are given the following utility function and price of commodities q1 and q2: U = 3q1+q1q2-5q2-15 P1=3 and p2=2 If the corresponding bugdet is 20. i. Write the consumer's budget equation,augmented objective function, ii.construct a constrained utility maximization problem out of the information given above, Is the second order condition for a maximum satisfied? Iii. Find the optimum level of U and the levels of q1 and q2 that will satisfy the first order condition for a maximum.

You are given the following utility function and price of commodities q1 and q2: U = 3q1+q1q2-5q2-15 P1=3 and p2=2 If the corresponding bugdet is 20. i. Write the consumer's budget equation,augmented objective function, ii.construct a constrained utility maximization problem out of the information given above, Is the second order condition for a maximum satisfied? Iii. Find the optimum level of U and the levels of q1 and q2 that will satisfy the first order condition for a maximum.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 6P

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