If x 1 and x 2 are the number of items of two goods bought, a customers

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If x₁ and x₂ are the number of items of two goods bought, a customer’s utility is

U(x₁, x₂) = 2x₁x₂ + 3x₁.

The unit cost is $1 for the first good and $3 for the second. Use Lagrange multipliers to find the maximum value of U if the consumer’s disposable income is $100. Estimate the increase in optimal utility if the consumer’s disposable income increases by $6.

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Applied Calculus

ISBN: 9781119275565

6th Edition

Authors: Deborah Hughes Hallett, Patti Frazer Lock, Andrew M. Gleason, Daniel E. Flath, Sheldon P. Gordon, David O. Lomen, David Lovelock, William G. McCallum, Brad G. Osgood, Andrew Pasquale

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Question Posted: Apr 06, 2023 02:54 AM

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If x 1 and x 2 are the number of items of two goods bought, a customers

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The constraint is gx 1 x 2 x 1 3x 2 100 We need to solve t...View the full answer

Applied Calculus

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