Question: Question 2: Consider the utility function u(21, 2) = (21+ 1)2(202 + 3)2. 2.1 Is u(X1, X2) strictly monotonic? Is it concave? Is it quasiconcave?

Question 2: Consider the utility function u(21, 2) = (21+ 1)2(202 + 3)2. 2.1 Is u(X1, X2) strictly monotonic? Is it concave? Is it quasiconcave? 2.2 Argue that the budget constraint is binding, and that the first order conditions are sufficient in the utility maximization problem. 2.3 Derive the (Marshallian) demand functions. Is the optimal bundle always inte- rior? Do you agree that it is interior if income I is sufficiently large? Prove your answer and carefully explain the economic intuition. 2.4 Derive the (Hicksian or) compensated demand functions

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