Chapter 14.5, Problem 18E

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11th Edition

Ronald J. Harshbarger + 1 other

ISBN: 9781305108042

Textbook Problem

** Utility** Suppose that the utility function for two commodities is given by

To determine

**To calculate:** The values of *x* and *y* that maximize utility. Suppose that the utility function for two commodities is given by

Explanation

**Given Information:**

The provided utility function is

**Formula used:**

According to the Lagrange multipliers steps to obtain maxima or minima for a function

Step 1: Find the critical values of

Step 2: The critical points of

Step 3: The critical points of

For a function *f* with respect to *y* is calculated by taking the derivative of *y* and keeping the other variable *x* constant. The partial derivative of *f* with respect to *y* is denoted by

Power of

Constant function rule for a constant

Coefficient rule for a constant

**Calculation:**

Consider the function,

The provided constraint is

According to the Lagrange multipliers method,

The objective function is

Thus,

Substitute

Since, the critical points of

Recall that, for a function *f* with respect to *y* is calculated by taking the derivative of *y* and keeping the other variable *x* constant.

Use the power of *x* rule for derivatives, the constant function rule and the coefficient rule.

Thus,

And,

And,

Solve the equations

Substitute

Simplify it further,

That is,

Now, calculate values of *x* and *y*.

Consider the equation

Substitute

Consider the equation

Substitute

Sect-14.1 P-1CPSect-14.1 P-1ESect-14.1 P-2ESect-14.1 P-3ESect-14.1 P-4ESect-14.1 P-5ESect-14.1 P-6ESect-14.1 P-7ESect-14.1 P-8ESect-14.1 P-9E

Sect-14.1 P-10ESect-14.1 P-11ESect-14.1 P-12ESect-14.1 P-13ESect-14.1 P-14ESect-14.1 P-15ESect-14.1 P-16ESect-14.1 P-17ESect-14.1 P-18ESect-14.1 P-19ESect-14.1 P-20ESect-14.1 P-21ESect-14.1 P-22ESect-14.1 P-23ESect-14.1 P-24ESect-14.1 P-25ESect-14.1 P-27ESect-14.1 P-28ESect-14.1 P-29ESect-14.1 P-30ESect-14.1 P-31ESect-14.1 P-32ESect-14.1 P-33ESect-14.1 P-34ESect-14.1 P-35ESect-14.1 P-36ESect-14.1 P-37ESect-14.1 P-38ESect-14.2 P-1CPSect-14.2 P-2CPSect-14.2 P-3CPSect-14.2 P-4CPSect-14.2 P-5CPSect-14.2 P-1ESect-14.2 P-2ESect-14.2 P-3ESect-14.2 P-4ESect-14.2 P-5ESect-14.2 P-6ESect-14.2 P-7ESect-14.2 P-8ESect-14.2 P-9ESect-14.2 P-10ESect-14.2 P-11ESect-14.2 P-12ESect-14.2 P-13ESect-14.2 P-14ESect-14.2 P-15ESect-14.2 P-16ESect-14.2 P-17ESect-14.2 P-18ESect-14.2 P-19ESect-14.2 P-20ESect-14.2 P-21ESect-14.2 P-22ESect-14.2 P-23ESect-14.2 P-24ESect-14.2 P-25ESect-14.2 P-26ESect-14.2 P-27ESect-14.2 P-28ESect-14.2 P-29ESect-14.2 P-30ESect-14.2 P-31ESect-14.2 P-32ESect-14.2 P-33ESect-14.2 P-34ESect-14.2 P-35ESect-14.2 P-36ESect-14.2 P-37ESect-14.2 P-38ESect-14.2 P-39ESect-14.2 P-40ESect-14.2 P-41ESect-14.2 P-42ESect-14.2 P-43ESect-14.2 P-44ESect-14.2 P-45ESect-14.2 P-46ESect-14.2 P-47ESect-14.2 P-48ESect-14.2 P-49ESect-14.2 P-50ESect-14.2 P-51ESect-14.2 P-52ESect-14.2 P-53ESect-14.2 P-54ESect-14.2 P-55ESect-14.2 P-56ESect-14.3 P-1CPSect-14.3 P-2CPSect-14.3 P-3CPSect-14.3 P-1ESect-14.3 P-2ESect-14.3 P-3ESect-14.3 P-4ESect-14.3 P-5ESect-14.3 P-6ESect-14.3 P-7ESect-14.3 P-8ESect-14.3 P-9ESect-14.3 P-10ESect-14.3 P-11ESect-14.3 P-12ESect-14.3 P-13ESect-14.3 P-14ESect-14.3 P-15ESect-14.3 P-16ESect-14.3 P-17ESect-14.3 P-18ESect-14.3 P-19ESect-14.3 P-20ESect-14.3 P-21ESect-14.3 P-22ESect-14.3 P-23ESect-14.3 P-24ESect-14.3 P-25ESect-14.3 P-26ESect-14.3 P-27ESect-14.3 P-28ESect-14.3 P-29ESect-14.3 P-30ESect-14.4 P-1CPSect-14.4 P-2CPSect-14.4 P-3CPSect-14.4 P-4CPSect-14.4 P-1ESect-14.4 P-2ESect-14.4 P-3ESect-14.4 P-4ESect-14.4 P-5ESect-14.4 P-6ESect-14.4 P-7ESect-14.4 P-8ESect-14.4 P-9ESect-14.4 P-10ESect-14.4 P-11ESect-14.4 P-12ESect-14.4 P-13ESect-14.4 P-14ESect-14.4 P-15ESect-14.4 P-16ESect-14.4 P-17ESect-14.4 P-18ESect-14.4 P-19ESect-14.4 P-20ESect-14.4 P-21ESect-14.4 P-22ESect-14.4 P-23ESect-14.4 P-24ESect-14.4 P-25ESect-14.4 P-26ESect-14.4 P-27ESect-14.4 P-28ESect-14.4 P-29ESect-14.4 P-30ESect-14.4 P-31ESect-14.4 P-32ESect-14.4 P-34ESect-14.4 P-35ESect-14.4 P-36ESect-14.5 P-1CPSect-14.5 P-2CPSect-14.5 P-3CPSect-14.5 P-4CPSect-14.5 P-1ESect-14.5 P-2ESect-14.5 P-3ESect-14.5 P-4ESect-14.5 P-5ESect-14.5 P-6ESect-14.5 P-7ESect-14.5 P-8ESect-14.5 P-9ESect-14.5 P-10ESect-14.5 P-11ESect-14.5 P-12ESect-14.5 P-13ESect-14.5 P-14ESect-14.5 P-15ESect-14.5 P-16ESect-14.5 P-17ESect-14.5 P-18ESect-14.5 P-19ESect-14.5 P-20ESect-14.5 P-21ESect-14.5 P-22ESect-14.5 P-23ESect-14.5 P-24ESect-14.5 P-25ESect-14.5 P-26ECh-14 P-1RECh-14 P-2RECh-14 P-3RECh-14 P-4RECh-14 P-5RECh-14 P-6RECh-14 P-7RECh-14 P-8RECh-14 P-9RECh-14 P-10RECh-14 P-11RECh-14 P-12RECh-14 P-13RECh-14 P-14RECh-14 P-15RECh-14 P-16RECh-14 P-17RECh-14 P-18RECh-14 P-19RECh-14 P-20RECh-14 P-21RECh-14 P-22RECh-14 P-23RECh-14 P-24RECh-14 P-25RECh-14 P-26RECh-14 P-27RECh-14 P-28RECh-14 P-29RECh-14 P-30RECh-14 P-31RECh-14 P-32RECh-14 P-33RECh-14 P-34RECh-14 P-35RECh-14 P-36RECh-14 P-1TCh-14 P-2TCh-14 P-3TCh-14 P-4TCh-14 P-5TCh-14 P-6TCh-14 P-7TCh-14 P-8TCh-14 P-9TCh-14 P-10T

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