Suppose that Maggie cares only about chai and bagels. Her utility function is U = CB, where C is the number of cups of chai she drinks in a day, and B is the number of bagels she eats in a day. The price of chai is $3, and the price of bagels is $1.50. Maggie has $6 to spend per day on chai and bagels.
a. What is Maggie’s objective function?
b. What is Maggie’s constraint?
c. Write a statement of Maggie’s constrained optimization problem.
d. Solve Maggie’s constrained optimization problem using a Lagrangian.