Consider a consumer with the following preferences: U(x,y) = 20logx+y subject to 10x+10y=100 1) Write the consumer maximization problem, with all…

Consider a consumer with the following preferences:

U(x,y) = 20logx+y subject to 10x+10y=100

1) Write the consumer maximization problem, with all constraints.

2) Construct the Lagrangian, and solve for the optimal choices of x and y. Verify that you have included the appropriate constraints.

* I first solved it without knowing that if I just solve the equation, I get x=20 which does not adhere to the budget constraints (if you put x=20 to the budget constraints, you get 200+10y which is already bigger than 100.) Please help.

Don't hesitate - Save time and Excel

Are you overwhelmed by an intense schedule and facing difficulties completing this assignment? We at GrandHomework know how to assist students in the most effective and cheap way possible. To be sure of this, place an order and enjoy the best grades that you deserve!

Post Homework
Top