Question: Question 2a a) A planner in a small, open economy has a utility function U = xix2 and production takes place according to the production

Question 2a

a) A planner in a small, open economy has a utility function U = xix2 and production takes place according to the production mctions y1 = 10L1 0.5L? 3'2 = 10112 Lg. The world prices of the goods are p1 = 10 and p2 = 5. The total amount of labour available in the economy is 5 units. (ii) Write down the Karush-Khun-Tucker conditions

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