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Consider an agent who want to maximize her utility function, 11 2 2 U (C₁, C₂) = C₁ C₂² subject to the budget constraint
Posted: Sun Jul 03, 2022 6:56 am
by answerhappygod
- Consider An Agent Who Want To Maximize Her Utility Function 11 2 2 U C C C C Subject To The Budget Constraint 1 (36.81 KiB) Viewed 21 times
Consider an agent who want to maximize her utility function, 11 2 2 U (C₁, C₂) = C₁ C₂² subject to the budget constraint, C2 C₁ + 2 with C₁, C₂ >0 indicating consumption of commodity 1 and 2, respectively. = 1 •The critical point is (c₁, c₂) = 0·0). • The shadow price is λ = • The determinant of the bordered Hessian is D(c₁.C₂A) = 2