Question: Consider the following constrained maximization problem: max 1,2 100 1 2 s.t. 1 2 = where all constants , , and are positive. (a) Use

Consider the following constrained maximization problem: max 1,2 100 1 2 s.t. 1 2 = where all constants , , and are positive. (a) Use the Lagrange multiplier method to solve the problem. (b) Suppose the solution you found in part (a) is = (1 , 2 ) . Verify that 1 and 2 are both homogeneous of degree 0 as functions of , , and

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