|
Title: Rachel spends her income, Y, on Rock Shows (R) and Sunglasses (S) with prices pR and pS. Rachel's ... Post by: MrsAngelD on Nov 12, 2017 Rachel spends her income, Y, on Rock Shows (R) and Sunglasses (S) with prices pR and pS. Rachel's preferences are given by the Cobb-Douglas utility function
U(X,Y) = R.8S.2 a. Write out the Lagrangian for Rachel's utility-maximization problem. b. Use the Lagrangian to derive Rachel's optimal choice, (R*,S*). c. For a given utility level, U0, derive Rachel's Expenditure function E(pR,pS,U0). d. Use the Expenditure function to derive Rachel's compensated demand for Rock Shows. Title: Re: Rachel spends her income, Y, on Rock Shows (R) and Sunglasses (S) with prices pR and pS. ... Post by: forrest on Nov 12, 2017 Content hidden
|