Show that at the solution you found in (c), the tangency condition is satisfied: M RS = p1/p2. (d) (e) How did the '50' in the utility function influence the optimal con- sumption bundle? How did the '10' in the utility function influence the optimal consumption bundle? (i.e., how would the optimal bun- dle change if these coefficients were to change?). How would the optimal bundle change if the utility function was xx2? Lastly, how would the optimal bundle change if the utility function was log- linear: 2 ln x1+ In x2?

Show that at the solution you found in (c), the tangency condition is satisfied: M RS = p1/p2. (d) (e) How did the '50' in the utility function influence the optimal con- sumption bundle? How did the '10' in the utility function influence the optimal consumption bundle? (i.e., how would the optimal bun- dle change if these coefficients were to change?). How would the optimal bundle change if the utility function was xx2? Lastly, how would the optimal bundle change if the utility function was log- linear: 2 ln x1+ In x2?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.11P

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