Answer Happy

You should show all the calculation steps. Answers without the procedure will not give you any point. wa Given Kaan's utility function u(x,y) = 500 – е-2x – e-y, answer the following questions. x (a) Suppose the price of x is 10 TL, the price of y is 40 TL and the monthly income is 1000 TL. Kaan uses all of his income each month to purchase x and y. Solve the constrained optimizatic problem and find x,y that maximize the utility. (b) Confirm the second-order condition for part (a) for maximization. (c) Suppose that the income goes up by one unit. How much will it change the maximized level of utility? Answer by using the Envelope Theorem.