Constraint: 2x + py = m a) Show that the utility function is concave. b) Find the Lagrange multiplier. c) Derive the utility maximizing demand function for good y as a function of (p, m).

College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter6: Systems Of Equations And Inequalities
Section6.5: Systems Of Inequalities
Problem 9ECP
icon
Related questions
Question
Utility function: U (x,y) = 2x +y (x 2 0,y 2 0)
Constraint: 2x+py = m
a) Show that the utility function is concave.
b) Find the Lagrange multiplier.
c) Derive the utility maximizing demand function for good y as a function of (p, m).
d) Find the homogeneity of the function you derived above.
e) Find aU/am and comment on your answer.
Transcribed Image Text:Utility function: U (x,y) = 2x +y (x 2 0,y 2 0) Constraint: 2x+py = m a) Show that the utility function is concave. b) Find the Lagrange multiplier. c) Derive the utility maximizing demand function for good y as a function of (p, m). d) Find the homogeneity of the function you derived above. e) Find aU/am and comment on your answer.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Recommended textbooks for you
College Algebra
College Algebra
Algebra
ISBN:
9781337282291
Author:
Ron Larson
Publisher:
Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage