Question: In a utility maximization problem, Max x,y U( x, y) = 4xy, the consumer needs to spend all of her budget and the budget constraint

In a utility maximization problem, Maxx,y U( x, y) = 4xy, the consumer needs to spend all of her budget and the budget constraint is 2x + 4y = I.

Would the laranger multiplier of this problem always be positive or

it can equal to zero?

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!