I Now consider Cornelius and Wheaton as consumers who eat a balanced diet of both foods....

 

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I Now consider Cornelius and Wheaton as consumers who eat a balanced diet of both foods. Denote Cornelius' consumption of corn by q and wheat by q, and Wheaton's con- sumption of corn by q and wheat by qu. (Note: That is, the subscript denotes the good consumed, and the superscript the consumer.) Their utility functions are 2 11 (a) (5) Find the total income earned by Cornelius IC and Wheaton I. (b) (5) Set up each consumer's utility maximization problem, write the Lagrangians, and find the first order conditions. 9 u²(L, qu ) = log qc + 11 2 qc qc+qu 11 log q uw (qu, qw) = (c) (5) Find an equation that describes the line of Pareto efficient allocations by expressing Cornelius' share of wheat consumption aw q as a function of his share of corn q+qw consumption ac = 1 W log q + log qw 9 11 I Now consider Cornelius and Wheaton as consumers who eat a balanced diet of both foods. Denote Cornelius' consumption of corn by q and wheat by q, and Wheaton's con- sumption of corn by q and wheat by qu. (Note: That is, the subscript denotes the good consumed, and the superscript the consumer.) Their utility functions are 2 11 (a) (5) Find the total income earned by Cornelius IC and Wheaton I. (b) (5) Set up each consumer's utility maximization problem, write the Lagrangians, and find the first order conditions. 9 u²(L, qu ) = log qc + 11 2 qc qc+qu 11 log q uw (qu, qw) = (c) (5) Find an equation that describes the line of Pareto efficient allocations by expressing Cornelius' share of wheat consumption aw q as a function of his share of corn q+qw consumption ac = 1 W log q + log qw 9 11

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a Total Income Earned by Cornelius Ic and Wheaton Iw The total incomes earned by Cornelius and Wheaton can be calculated using the budget constraint e... View the full answer