Question: 2. A consumer's utility function is given by U(x1, x2) = 2x1x2 + 3x1 where x1 and x2 denote the number of items of two

2. A consumer's utility function is given by U(x1, x2) = 2x1x2 + 3x1

where x1 and x2 denote the number of items of two goods G1 and G2 that are bought. Each item costs $1 for G1 and $2 for G2. Use Lagrange multipliers to find the maximum value of U if the consumer's income is $83. Estimate the new optimal utility if the consumer's income rises by $1.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

PART 1: Consider an economy with two consumers, Arnold and Bryan, and two consumption goods, 1 and 2. The initial endowment of Arnold is A = (6, 0), while the one of Bryan is B = (0, 6). Their...

A consumer's utility function is given by U(x 1 , x 2 ) = 2x 1 x 2 + 3x 1 where x 1 and x 2 denote the number of items of two goods G1 and G2 that are bought. Each item costs $1 for G1 and $2 for G2....

1) A consumer's utility function is given by U(x1, x2) = 2x1 x2 + 3x1 where x1 and x2 denote the number of items of two goods G1 and G2 that are bought. Each item costs $1 for G1 and $2 for G2. What...

Please solve the below questions so I can learn it 1) A consumer's utility function is given by U(x1, X2) = 2x1 X2 + 3x1 where x1 and x2 denote the number of items of two goods Gl and G2 that are...

Problems (Solusand to problemis mariged * appear at the bock of this book. Problems adapted to one calculus in availabit saint at 1. Which assumption about consumer preferences does by three...

Question one. Chepa's utility function is given by U (x, y) = ln x + 4 ln y. Assume that Chepa has endowments (10, 10) and that Py = 10 throughout the problem. I need help with questions G) and H)...

q. Consider an economy consisting of identical individuals with preferences given by U (x1, x2, l) = ?1 log (x1) + ?2 log (x2) + (1 ? ?1 ? ?2)log (1 ? l). Individuals supply labor, l, at a market...

Solution Set 1. 8 points. Draw an indifference curve map representing preferences with the following characteristics: (a) commodity 1 is a bad, (b) commodity 2 is a good, and (c) preferences are...

kindly solve these problems for me. strictly answer all questions 1. Peach-Lemon problem Consider the market of used cars. Sellers have two types of cars: peaches (cars in good condition) and lemons...

Please help me with these questions. Thanks a lot!!! Problem 1: J the consumer consumes only two goods with quantities x1 and x2 respectively. J's utility function is: u(x1; x2) = ln x1 + x2 + 2. Let...

Prove that any linear system with a nonsingular matrix of coefficients has a solution, and that the solution is unique.

Describe some of the measures used by companies to discourage unfriendly takeover attempts.

Determine whether the function is a probability density function over the given interval. f ( x ) = 1 4 x , 4 x 7 Yes No

For the folowing mathir, i it mvertiale? 1s it dagonalzable ? 2 IS -2 -2 -3 1. Both imvertible and bzable. duyone Diagonalizable, but not mvertisle 4. lavertidle, but not dingoralizabe. 2. Neither...

Find a for R under which the fransformation 2 basis 4 Ta) = 3. 2 -1 is mutiplicaten by a dugonal matri . 3 3- -2 4.

For the matrix 4 A = -1 - find a C matrix in the deceomposition where A= PCp". the decempaion - V5 3 1.C = 3 3 2. C= -3 3 3 -13 -3 3. C -3 4 4. C= -6 V3

For the matrix 5 -3 A= 7 -1 Find one rasible Pmatix in the decomposition A= Pcp! 3 3 l P= 3-2VJE 3+2VBi d. P 3 2 - 213 3. P= 2 VB 2 4. P= 2

Sove X = AX for kog,z.. where X, - [1,1' and A= AXx for k=0,!, 2,.-- 4.4 4 - 5 -4.6 5 3. X, = (sC}|. 5 %3D

Write a program to wish happy birthday to a student. Firstly, take today month and day as an input and secondly take birthday as an input in the form of month and day. If the input day and month...

3. If there are reasonable alternatives, think about your decisions based on the different reference points and see if there are any contradictions in the decisions.

4. It is only at this point that you can give the problem your full attention in relation to the various ways you have framed the problem.

1. To provide an insight into why a communication situation can be perceived differently depending on which psychological framework we choose to use.