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?
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.3P
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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?
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