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PaulKet PaulKet
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6 years ago
Consider a consumer with the Cobb-Douglas utility function U(q1,q2) =   , where q1 and q2 are the quantities of goods 1 and 2 consumed, respectively. This consumer has an income denoted by Y which is devoted to goods 1 and 2. The prices of goods 1 and 2 are denoted p1 and p2.
a.   What is this consumer's MRS as functions of q1 and q2?
b.   Write out the Lagrangian for the consumer's utility maximization problem.
c.   Using the Lagrangian method, derive the consumer's demand equations for both goods as functions of the variables p1, p2, and Y.
Textbook 
Microeconomics: Theory and Applications with Calculus

Microeconomics: Theory and Applications with Calculus


Edition: 4th
Author:
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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
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RumkoRumko
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PaulKet Author
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6 years ago
Thank you for helping me on my economics homework!
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
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