Question: 1) Given U = (x+2)(y+1) and Px = 4, Py = 6, and I = 130 a) Write the Lagrangian function b) Find the optimal

1) Given U = (x+2)(y+1) and Px = 4, Py = 6, and I = 130

a) Write the Lagrangian function

b) Find the optimal values of x* and y*

c) Is the second-order sufficient condition for maximum satisfied?

d) Does the answer in (b) give any comparative-static information? What?

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