Utility maximization problems | ECON | Montclair State University
Cobb-Douglas utility function Let the utility function be u(x,y)=x3y7. Let the price of good xbe pand the price of good ybe qand the income be I. Applying the method of Lagrange multiplier, find the utility maximizing consumption bundle (x∗,y∗). Also determine the value of Lagrange multiplier λ∗. 2. Quasi-linear utility function Let the utility function be u(x,y)=x+0.1lny. Let the price of good xbe $1per unit and the price of good ybe $pper […]