Determine the optimal consumption bundle

Reference no: EM133232169

Assignment:

Question:

Consider the utility function of the following form: (x,y) = √xy. The price of good x is $20 and good y is $10. Assume total expenditure on two goods cannot exceed $200.

a) Use the Lagrange method to determine the optimal consumption bundle. Show all working.

b) Verify the optimal consumption bundle in a) above satisfy the consumer equilibrium condition.

Reference no: EM133232169

Questions Cloud

Collaborative space for conversation : Treat this discussion as a collaborative space for conversation about the course concepts and for learning from your peers' diverse perspectives. To ensure an i

What is your perception of ceo eric hudson : On what do you base your perception? What is the public's perception of green products according to Marketing Director C.S. Webb?

Identify major ethical issues raised by information systems : Elaborate on the below major ethical issues raised by information systems that include moral dimensions.

How does sacrificed conversation for more connection : How does Sherry Turkle support her claim that we have "sacrificed conversation for more connection"expecting "more from technology and less from one another"?

Determine the optimal consumption bundle : Use the Lagrange method to determine the optimal consumption bundle. Show all working.

Effect an increase in price of grapes in market for wine : What effect will an increase in the price of grapes have in the market for wine? Increase demand-Increase supply.

How has this technology effected the market for university : The development of technology and the internet has allowed students to earn their degrees in the online environment.

What does this phenomenon have to do with elasticity : Give some thoughts about the article below and What does this phenomenon have to do with elasticity?

Explanation of the concept of culture in criminal justice : An explanation of the concept of culture in criminal justice. Describe two positive and two negative aspects of culture in the criminal justice organization yo

User Account

All Pages