Consider an individual who consumes quantities x and quantitites y of two goods in each week,...

 

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Consider an individual who consumes quantities x and quantitites y of two goods in each week, and works for hours. These three quantitites (x, y, e) are chosen to maximize the utility function U(x, y,0) =a lnx+ Blny+(1-a-B) In (L-C) which is defined for Osl≤L and for x, y>0. The individual has the bugdet constraint px +qy=wl, where w is the wage rate per hour. Find (x*, y*, *) in terms of parameters. Consider an individual who consumes quantities x and quantitites y of two goods in each week, and works for hours. These three quantitites (x, y, e) are chosen to maximize the utility function U(x, y,0) =a lnx+ Blny+(1-a-B) In (L-C) which is defined for Osl≤L and for x, y>0. The individual has the bugdet constraint px +qy=wl, where w is the wage rate per hour. Find (x*, y*, *) in terms of parameters.

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To find the best quantities x y that maximize the utility function Ux y lnx lny 1 lnL under the budg... View the full answer